Follow
Luis Miranda

Skilling Challenges in a Welfare State called India

When we talked to infrastructure developers 10 years back on what their biggest challenges were, it invariably included “getting people”. That was one of the drivers for setting up a skill training company within Manipal Global Education together with City & Guilds of the UK, the world’s leading skill certification organisation (full disclosure: I still remain associated with this company). The government also focussed a lot on skill training and set up NSDC, which in turn helped spawn a host of other skilling companies, and NSDA. But most of these companies haven’t grown the way they were expected to and the government must be way behind its skilling targets.

Various explanations have been given for this. In this blog I want to outline one reason – the fact that we are a welfare state has made kids less hungry to work hard for a job. Let me explain, before you start slamming me.

I am involved with India’s first dedicated student loan provider for vocational training courses, Springboard Finance, which is helping pilot a programme on student loans for vocational training. Mihir Sheth, the promoter, told me that some kids quit their jobs within a few weeks because of reasons like “my boss shouted at me”, “I had to be out in the sun too long”, “I wanted to be closer to home”, “ the food is not good”, “I don’t like the clothes they make me wear”, etc. And these young adults would prefer to be unemployed than to struggle at the job they have.

So on one side we have employers looking for employees and on the other hand we have youth who chose to be unemployed or underemployed. Why would these youth prefer to be unemployed and not take up whatever job they can get? Admittedly this is not the reaction of most students, but it is representative of a proportion that is still statistically significant.

I can think of two reasons for this – (1) these kids have the safety net of staying at home with their parents or relatives and so their basic needs are taken care of. In some parts of the world they are unlikely to have this privilege and would therefore take up whatever jobs they can get. (2) Because of this safety net, they are happy surviving on whatever little they get from their family or from schemes like NREGA’s Mahatma Gandhi National Rural Employment Scheme, a corruption-riddled employment scheme that the Congress hopes will help them win the next election. It is a well-intentioned programme where, like in all well-intentioned programmes, the challenges lie in its implementation. When I was in Manipur and Nagaland earlier this year the biggest employer seemed to be NREGA-created programmes. These schemes often dull the drive of the youth and also severely impact job migration (which has it positives and its negatives).

A friend of mine, Praveen Chakravarty, who has worked a lot on skilling issues, explained to me that these unemployment insurance schemes have also effectively raised the minimum wage level in the country, which is a positive step. But the higher compensation was meant to be balanced by higher accountability and performance levels. Unfortunately the latter part has been forgotten and as with most government programmes, outputs are ignored. This is why minimum wages have risen without any increase in performance level.

So unless we find ways of tweaking these safety nets we will continue to see a shortage of labour which will impact projects and businesses across the country.

An alternative to tweaking these safety nets is to make the youth understand the importance of hard work by changing their attitude. A few organisations look at this aspect when doing skill training. I was recently discussing this issue with Simon Winter and Punit Gupta of TechnoServe, an organisation I am involved with that empowers people in developing economies build businesses that break the cycle of poverty. They have a large programme with The MasterCard Foundation to train rural youth in East Africa to be entrepreneurs. A part of the STRYDE Program is mentorship and counselling to change behaviour patterns among the youth to work hard at a career. This has to become an essential part of skill training in India.

Post Your Comment
Name
Required
Email
Required, will not be published
Comment
All comments are moderated
 

Comment
Amiya Kumar Mishra
In my opinion it is a matter of convenience of all the stake holders: It is not convenient for the politician to spend money in any scheme other than welfare schemes (e.g. NREGA) for votes. It is not convenient for the business class to shell out a bit more to the real worker as he needs to grow at geometric progression ( e.g. a power plant worth Rs.4000 crores in Chattisgarh was said to break even in two years ... any guess on how much the workers who built the plant got or the villagers who gave their land got). It is not convenient for NSDC partners to train & motivate themselves about really skilling the needy..... for them, it is a government scheme for doing business .... it is the poor youth who should be lectured to be sincere & hard working ... the educated skill training campaigner is already motivated. And finally it is not convenient for the poor youth of India ..... he gets Rice @ Re.1 to eat, gets a free bicycle to move, has NREGA & other schemes to take care of his other physiological needs......a free laptop to study..... he feels safe at home ..... gets love & belongingness in his home town.... he feels satisfied. Can we lecture ( change attitude, importance of hard work etc.) this young generation who are being skilled under govt. schemes by giving him a wage of Rs. 6000 p.m, putting him in unhygienic and unsafe working conditions to leave all satisfaction he has being at home? If the planners are serious about skilling India, they have to look at needs of everyone, not just people who are high on Maslow’s hierarchy model but also the underprivileged youth of India ... today’s youth’s basic needs are met being at home ... can the system raise its bar is the big question.
Pooja Gianchandani
Fantastic to see that your oversight on skilling issues continues Luis. I still remember you saying (am paraphrasing of course) - " financial services will have to reach every Indian, for which you will need many Indians - that are skilled and trained" - during session on Sector Skills Council for Financial Services during the Global Skills Summit in 2007. Financial linkages are a key towards making skills and training aspirational..... We are doing a lot of work in that space(www.ilfsskills.com) and i would be happy to re-connect Cheers! Pooja
Dear Pooja, good to reconnect. Making vocational jobs aspirational is key - both in terms of compensation and dignity of labour. Luis
Gayatri Eassey
Highly interesting blog post! Thank you for sharing this. I am currently a fellow with the American India Foundation and have been working on skills development in India for the past year. We just completed a survey of young people in India and found a tremendous amount of frustration among youth who wanted to work but seemed to face a lack of options which they found suitable - this mis-match of youth aspirations with the jobs open causes such a deep level if disillusionment among youth. Ultimately I think much of this issue comes from the lack of dignity or labor or rather lack of respect for a hard days work. So many people in India work tirelessly day in and day out but get no more economic benefit and no more access to opportunity. I thank you for raising this issue - an important conversation to keep going - I'm glad you brought up the TechnoServe model - there is another org in West Bengal doing great work with motivating and employing young people called iMerit.
Gayatri, thanks for your post. Yes, the lack of dignity of labour is a big problem in India, and a problem that will take time to get over. One factor that could help speed up that process is the shortage of labour and the rise in the implied minimum wage due to schemes like NREGS. Luis
Anshuman Singh
As a member of the Indian youth , I'd like to put my two cents in. I must confess I felt a certain amount of antagonism when I started reading the article, the kind one feels when one's age/peer group is criticised , no matter how nebulously. However , having pondered this article at length made me realize that your words are very true. Good attitude towards work and basic professionalism is lacking greatly among our age group, across the spectrum and across industries, whether it be due to being eligible for NREGA, or having a financial safety net provided by our families. Speaking from my personal observations, inculcating the value of money and work and being exposed to the real world from an earlier age would go a long way in helping productivity in the upper end of the social strata, and increased basic educational levels at the lower end. Its a gem of an article Sir, and makes one introspect.
Anshuman, thanks for your comments. I have received emails from friends across the world that we are not alone. For example in Spain (where 50% of the youth are unemployed) the youth would rather stay at home than go work in the fields. Somewhere, the will to work hard seems to be fading and I do not know what the reasons are. Hence any form of skill training has to include behaviour training.
I quite agree with the analysis, yet was wondering how this should be seen in the context of western economies, where social security at the national level makes savings(individual) almost inconsequential?
Himanshu, friends have written that in Canada and Australia the work attitude is the same where the welfare system favours drones. In Australia a friend is working on changing work attitudes with the youth through counselling.
Amul Urdhwareshe
I can't agree more with these views. In fact beyond a point the support system is likely to do more harm then good. There is a story from my childhood wherein a father insists on his son earning something on his own before he can get a meal in the house. His indulgent wife keeps on giving money to the son which he hands over to his father every evening as being earned by him. The wise father keeps throwing that coin in the well till one day the mother also is fed up and the son actually goes out and earns. That evening the son holds his father's hand to prevent him from throwing the money into the well! The moral of the story is obvious in this context. Second point about the mindset change is also on the mark. Not only just the youth, but we as a nation, need to recognize and respect the work that we do in all its seriousness. The casual attitude towards work in the public and also in the private sector is what probably most distinguishing factor which holds India back from its full potential. Once we recognize that any work done sincerely and honestly needs to be fully respected we would be a great country and civilization!
Dear Amul, thanks for your comments. I am actually surprised to receive no criticism for my comments about the poor work ethic of some of the unemployed youth. This casual attitude to work has to change.
Amul Urdhwareshe
Because that is true! In fact the comment is unfair if you single out just the youth, as the attitude is age-agnostic. The youth after all picks it up from their parents and other seniors. Leading by example is probably one of the effective strategy.
Amul, I stand corrected ... attitudes across the board have to change.
Great article....A third party assessment of work done by Youth4Jobs with persons with disability showed that 80% of youth were still working...the third party assessing organisation who was used to non-disabled trainings with 50% -60%dropouts said he was amazed by the way companies were willing to go on record that this was a new labour pool they would like to keep hiring from.....likewise girls....So a lesson for skilling organisations could be to focus on the unreached and vulnerable who really need and value the job, even though the training is challenging. . There is no denying the fact that changing mindsets has to be part of skilling ( like STYRDE). Remember , most of the rural youth are first generation organised sector workers in an eco-sphere of subsidies and grants in election times. I have had mothers calling me up saying my son has worked for 15 days in the company, where are his wages - the shift from wage labour to salary has not been understood. The way forward in the short term is every training organisation has to embed two modules in their trainings ;a) necessity of hard work and remaining in the company at least for one year b) values .Also encouraging them to enrol in open university to finish a degree, as otherwise they hit a glass ceiling. With continuous feedback from voices like this blog, subsidies will get tweaked for sustainable models to emerge. I am an incorrigible optimist!!!
Dear Meera, the work you guys are doing with disabled youth at Youth4Jobs is great. It shows that where there is hunger for work and the right attitude, staff turnover will drop. The training components you talked about are so critical - you must have experienced this with your work with the rural youth in AP. Thank god for your optimism!
Well written Luis and Agree.
Thanks, Payal.
Pupal Kumar Sinha
I am in total agreement with your views. The article is a real picture of the country. We need to do something seriously. An excellent article! Regards, - Pulak Sinha
Thanks, Pulak
a,balasubramanian
many upcoming SME owners in districts complain NREGA has caused acute labour shortage for them as these can get pay for no work. I understand that rural females underr NREGA get wages after paying the cut, buy junk food ( good business for FMCG) for kids and liquor for husbands . but there are also reports in The Hindu on certain places where NREGA has empowered the old rightly - so I guess NREGA results are mixed depending on the area and the quality of administration . The key may lie in improving and standardising NREGA administration all over India rather than junking it. When I travel inalnd I am surprised find the rural folks enriched by NREGA unable to carry heavy items and too tired to walk in the sun -in my view the most dangerous aspect of NREGA is that if it continues to be ill managed it might kill the initiative to work- demographic dividend can become a landmine with plenty of youths not able and willing to work. Right aptitude to work and earn is more important in India now than skills I guess as the HR cliche goes- hire aperson for the aptitute and train him for the skills.
Dear Bala, absolutely - as I mentioned in my blog, the scheme is well-intentioned but the devil is in the detail. Implementation challenges, including corruption and poor motivation by the implementing teams, kill the benefits. Of course many people will benefit from it, but there are also many others who will lose their incentive to work hard by growing dependent on the government for handouts - something I saw so vividly in Manipur. The hard workers prefer to migrate and work outside the state (this is also because of the insurgency problem in the state, which leads to extortion and poor private and public sector investments, other than government projects which disguise unemployment).
NREGA although increased the minimum wages is of no use as it's simply making workers lazy. In rural India workers are getting wage amount in 1 day the amount once they used to get in 2 days. Instead of working happily with more dedication as they are getting good wages, they are simply going work only on one day and the other day are simply drinking & sleeping in their homes.
Dear Indian, I agree. But it is a great socialist programme. Whether it translates into votes is to be seen.
Krishnan Neelakantan
The insight on the safety net provided by the support system at home is a really interesting one! One keeps hearing about entrepreneurs struggling to retain people (qualified or otherwise) because the 'working conditions' just didn't match up to their standards. I remember the promoter of a Hyderabad based power company telling us that the only reason they could get projects executed anywhere close to the timeline was because one of his partners was always on site, chasing project engineers out of the airconditioned project offices to go and monitor the activites involved in setting up he power plant. Another interview with the owner of a manufacturing SME near Kalyan revealed that skilled ITI graduates were increasingly prefering lower paid, semi-skilled jobs in retailing because of easier working conditions and a growing tilt in social acceptance towards blue collar jobs in services, rather than manufacturing.
Thanks, Krishnan. I didn't see the connection with a safety net till recently during one of my discussions on the topic. It is a challenge and training on attitudes seem to be one way to overcome this challenge.
Shirish Navlekar
I am sure that there will be umpteen number of views, all of them valid in a way or in a particular context. However, I feel that the root cause is building and shaping a right attitude towards work AND at a right (nascent) stage of student life - in schooling stage at an age group of 10-15. We all see and keep talking about students in developed nations doing all kinds of jobs - newspaper delivery to working in stores and restaurants. Many of them from reasonably well to do family backgrounds. So, yes, the safety net of family support in our society is a deterrent in a way and to that extent, educating and skilling adults (parents) in our society is equally important. How do we do this is a big challenge. The skilling experts can explore this equally seriously. Have a few ideas for discussions in person.
I agree ... inculcating the right attitude to work at a younger age helps tremendously. Thanks for the comment. You know where to contact me - let's talk.
 
 
Luis Miranda
Luis Miranda started investing in India's infrastructure before it became fashionable. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank.
Luis has invested in and has been on the boards of companies like GMR Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, L&T Infrastructure and Manipal Global Education.
Today he is involved with various non-profits like Centre for Civil Society, SNEHA, Human Rights Watch, Gateway House and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth.
 
 
 
Luis Miranda'S POPULAR POST(S)
Most Popular
Luis Miranda's Activity Feed
June 01, 2013 15:45 pm by Amiya Kumar Mishra
In my opinion it is a matter of convenience of all the stake holders: It is not convenient for the politician to spend money in any scheme other than welfare schemes (e.g. NREGA) for votes. It is not convenient for the business class to shell out a bit more to the real worker as he needs to grow at ...
May 31, 2013 15:33 pm by Luis
Dear Pooja, good to reconnect. Making vocational jobs aspirational is key - both in terms of compensation and dignity of labour. Luis
May 31, 2013 15:31 pm by Luis
Gayatri, thanks for your post. Yes, the lack of dignity of labour is a big problem in India, and a problem that will take time to get over. One factor that could help speed up that process is the shortage of labour and the rise in the implied minimum wage due to schemes like NREGS. Luis
May 31, 2013 13:37 pm by Pooja Gianchandani
Fantastic to see that your oversight on skilling issues continues Luis. I still remember you saying (am paraphrasing of course) - " financial services will have to reach every Indian, for which you will need many Indians - that are skilled and trained" - during session on Sector Skills Council for F...
May 31, 2013 13:16 pm by Gayatri Eassey
Highly interesting blog post! Thank you for sharing this. I am currently a fellow with the American India Foundation and have been working on skills development in India for the past year. We just completed a survey of young people in India and found a tremendous amount of frustration among youth wh...