India’s skilling challenge

India’s current problem in higher education is a severe shortage of qualified faculty, organisational capital, and regulatory capacity.

higher education | skill development
Recently, the Indian government has started to allow foreign universities more room to operate in India. (Representational Picture)

When US treasury secretary Janet Yellen visited India late last year, on a mission to deepen economic and strategic ties between the two countries, her Indian counterpart, finance minister Nirmala Sitharaman, highlighted “skilling at scale” as one of India’s major challenges. Studies by the National Skill Development Corporation and the National Policy on Skill Development and Entrepreneurship merely confirm what is well known—India has a serious skill deficit. In this year’s Budget, several new government initiatives were announced for skills and training. And in April, in Washington, DC, the FM gave the same message, saying, “We are now focusing very much on skilling people, each according to their level…. Businesses and private sector entrepreneurs are also tied into it so that there is a link between the kind of training businesses want and actually those who are getting the training.”

This all sounds very promising, and it may indeed be that Indian policy making and implementation are finally getting to grips with what may be the country’s largest obstacle to attaining the levels of economic growth required by its demographics. But there is another side to the picture of a government push for imparting skills at scale. Also in April, a news story noted the problem of worthless degrees being offered by new private colleges that are popping up everywhere to take advantage of those desperately seeking both skills and credentials that might land them a decent job. The news story referred to a study (India Skills Report, 2022) produced by a talent assessment firm, in partnership with private sector, government and international organisations. The report itself offers standard analyses of changes in the kinds of skills that are needed, as well as an optimistic spin on new skilling initiatives, but the largest lesson of the report is that half of India’s young jobseekers lack the skills for employability. In this context, the mushrooming of institutions offering poor quality education only makes things worse.

In principle, fraudulent educational institutions can face legal repercussions, and sometimes do, but this is often too little and too late for those who are duped. One problem, of course, is that the Indian accreditation system for colleges is not comprehensive and is widely known to be a guide for prospective students. A deeper problem is that India has not expanded higher education in a rational manner. Of course, public education at lower levels has been most seriously underfunded, which has repercussions for those seeking a college education—they may not even have the preparation they should to go to that level. But much of public higher education has subsidised the upper middle class, making it difficult to fund expansion. Private colleges are a relatively new phenomenon in India, and they, too face many constraints to expansion. 

Recently, the Indian government has started to allow foreign universities more room to operate in India. But this is the likes of Oxford, Stanford and Yale—they will do nothing to solve India’s skilling challenge. They will not be operating in India’s smaller cities and towns, serving students who cannot even get admission to good domestic colleges, public or private. On the other hand, there are easily over 300 universities and colleges in the US and the UK alone, which could provide decent educations to the tens of millions of desperate young Indians. Many of these colleges are facing shortages of students themselves, as their domestic demographics change in the opposite direction to India’s. And they are producing domestic surpluses of doctorates in many fields. But why would they be different than existing domestic fraudsters or mediocrities?

The key features that India needs to develop in its higher education system are competition, reputation and effective regulation. Take the US, for example. There are reasonably strong regional accreditation organisations, to which every reputed college or university belongs. In some cases, the institution is strong enough not to need this accreditation, but not getting it would be a negative signal. India needs to import this system wholesale—a consortium of universities and colleges that will compete in India, but also operate within their now-globalised regulatory framework. They will compete for faculty globally, bring in organisational expertise and modern curricula, and find their own niches. They have existing reputations, both in the market and under their domestic regulatory umbrellas, which they will want to protect. 

India’s current problem in higher education is a severe shortage of qualified faculty, organisational capital, and regulatory capacity. There is no way to develop all of these quickly enough through a purely domestic effort. All three of these have to be imported at scale, in order to jumpstart “skilling at scale.” Doing anything quickly runs the risk of making mistakes. But India has also filled universities in the US, the UK and elsewhere with its best and brightest. They may not be in a position to return to India, but they can provide the expertise to examine potential entrants, and even oversee the first steps towards entry. Enormous time and thought has been given to FDI in sectors such retailing, but hardly any to one of India’s most important shortages, in the education sector. It is time to change that, and quickly.

(The author is professor of economics, University of California, Santa Cruz)

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First published on: 10-05-2023 at 04:15 IST