Breaking the Cycle of Poverty through Skilling
India, despite its strides in economic growth, continues to grapple with the persistent challenge of poverty. A key contributing factor to this issue is the prevalence of informal employment and the lack of access to formal skill development opportunities. Approximately 90 per cent of the Indian labour force is informally employed, characterized by low wages and the informal nature of employment.
Informal employment acts as a barrier for workers to invest in formal skills, as they often do not see it leading to higher income. Moreover, the private sector, in a capital-intensive economy with cheap labour available, tends to withdraw from training its employees, further perpetuating the cycle of low-skilled labour in the Indian labour market. Within this landscape, intra-state and interstate migrant labourers constitute a significant portion of the workforce.
India’s Skill Development Landscape
India has taken comprehensive steps to tackle challenges like the skill gap and unemployment crisis, evident from initiatives spanning from the establishment of Industrial Training Institutes in the 1950s to recent schemes such as Pradhan Mantri Gramin Kaushal Vikas Yojana and Deen Dayal Upadhyay Gramin Kaushalya Yojana. These efforts, managed even under a separate ministry for Skill Development and Entrepreneurship, demonstrate the nation’s steadfast commitment to addressing these pressing issues.
But as we monitor and evaluate these initiatives, we can observe a poor efficiency in its execution. Take for example PMKVY. It aimed to train nearly 15 million new workers each year from 2015 to 2022, alongside upskilling about 300 million existing workers. But it was only able to enrol 14 million candidates. Among them, close to 20 per cent dropped out and only 22 per cent were placed in jobs or as self-employed workers.
Studies conducted by the World Bank and central ministries have highlighted the need for sector-specific data collection to assess skill gaps. Their recommendations include aligning skill training curricula with industry needs and incentivizing private sector participation in skills training. It has to be closely read with the fact that despite three decades of economic liberalization, skill training still remains largely government-driven.
Innovative Empowerment: The STEP Academy Approach
In light of the absence of skilled labour and the prevalence of unskilled labour migration, initiatives like the STEP Academy (Skill Training, Employability, and Placement) have emerged to address these challenges. STEP, conceptualised by Aajeevika Bureau, stepped in, in a reality marked by a lack of education coupled with a deficit in vocational skills impeding the upward mobility of migrant workers who often find themselves confined to precarious manual labour throughout their working lives.
STEP operates primarily in tribal districts of southern Rajasthan and urban migrant destinations in Gujarat, offering training, employability inputs, and enterprise development support. The academy provides various courses aimed at enhancing the employability of youth and facilitating their transition from informal to formal sectors. STEP believes that migration should stand as one among many choices available, rather than being the sole choice available for the distressed rural youth.
The four courses offered by STEP are as follows.
1. Hunar — a month-long residential program together with on-site internships on particular skills such as mobile repairing, stitching, plumbing, bike repairing, etc. At the end of the course, participants receive certificates and toolkits to practice on their own.
2. Unnati is an advanced 15-day training typically taken by participants a couple of months after completion of Hunar. Here, after upskilling, participants are encouraged to start an enterprise on their own.
3. In On-the-job training (OJT), participants spend 45 days with a trainer at work site. It is typically taken by informal workers who cannot afford residential training but wish to learn a new skill to master it to improve their vertical mobility.
4. The placement readiness program is a 5-day program to acquaint trainees with work entitlements in the formal labour market such as fair wage, ESIC, written contracts, etc.
Over these years, these courses have had a transformative impact on the lives of over twenty-seven thousand youth by ensuring dignified employment. Data shows that the median number of work days of STEP alumni has increased from 100 to 250 and the increase in average monthly wage from ₹5878 to ₹10113. Further, 65% of erstwhile unemployed people are now employed with a marked 148% increase in stable monthly salary. 62% of alumni were engaged in less risky work environments than before. Entrepreneurship among trainees has quadrupled, a notable achievement given most of the trainees’ tribal background, where autonomy over work conditions is valued, unlike in typical informal employment.
Impact and Sustainability of STEP
What makes STEP, stand apart from other skill training endeavours is its commitment to post-training support and its dedication to paying forward the benefits of skill development within the community. Alumni are equipped with toolkits, certificates, and assistance in accessing government schemes and loans, fostering their continued growth and success beyond the program.
STEP training is catalyzing tribal youth, facilitating the formation of supportive networks and mentor relationships. These connections contribute to their skill development and social capital accumulation, fostering a community where knowledge and empowerment are shared across generations, thereby enhancing the program’s impact.
Through participation in STEP’s courses, individuals have reported positive outcomes, including increased household financial contributions and enhanced familial value. Particularly notable is the impact on women, who exhibit a greater interest in education and independence. STEP’s focus on confidence-building and challenging traditional gender roles resonates with broader societal values, potentially fostering an entrepreneurial mindset and improving socio-economic opportunities within the community.
To analyse the impact of training on migration, a study was conducted with 435 erstwhile students of Hunar and OJT courses. Among them, 57% had migrated before training and 72% of them stated economic needs as the cause of migration. However, at the time of the interviews, 92% of respondents were working locally implying that skill training has significantly improved employment opportunities in rural areas. Adding to it, trainees conveyed that they prefer not to migrate if they have viable livelihood opportunities near home.
The success of STEP training is that 83% of respondents are still working in the trade that they learned signifying its market demand. Further data suggests that trainees who remain in their STEP trade had higher earnings and are less inclined to migrate compared to those who left their trade. Further, 74% of respondents said that after STEP training they could earn more locally than before training. 66% of the trainees said that their training had influenced their migration decisions. About 47% of respondents conveyed that, if they had not been into STEP training, they would’ve been migrants by now.
Strategic Policy Initiatives for Breaking the Cycle of Poverty
To replicate the success of initiatives like STEP Academy, policymakers must heed the valuable lessons from their best practices in ensuring dignified employment through skill training. For efficiency in execution, state-led skill development initiatives must adopt an individual-centric approach, prioritizing diverse needs and aspirations of participants in program design and implementation all the while ensuring emerging market demands.
Drawing inspiration from STEP’s practice of building partnerships with private firms, by fostering better relations with small and medium industries and advocating the ease of doing business practices, the state can promote industries to offer apprenticeship training for skilled participants. This approach not only enhances skills but also promotes on-the-job training, fostering a skilled workforce. Further, the state should forge institutional tie-ups with higher secondary schools and colleges to broaden the reach and impact of skill training programs.
Moreover, to ensure the sustainability and effectiveness of skill training initiatives, the state should prioritize maintaining long-lasting relationships with trainees. Implementing a system where each trainee is assigned a unique ID would allow the state to monitor their type of employment, income and track their migration patterns, if any. This data-driven approach has the potential to enable better-informed policymaking in the realm of skilling, employment and urban policy frameworks.
One critical challenge that both STEP and the state must address is the gender gap in course enrolment. To tackle this, in-depth grassroots interactions with communities are essential. Parents need to be encouraged not only to support girls’ education and skill training but also to promote their socio-economic empowerment, thereby enabling them to live with dignity and autonomy. These efforts can significantly boost female labour participation rates and address the burgeoning issue of NEET (Not in Education, Employment and Training), as highlighted in the recent India Employment Report.
In conclusion, initiatives such as STEP Academy represent a beacon of hope for marginalized communities, particularly migrant labourers ensnared in the perpetual cycle of poverty and informal employment. By prioritizing dignified employment through comprehensive skill development endeavours, India can forge a path towards inclusive economic growth, social development, and the realization of a more prosperous future for all its citizens.
written by Vignesh M
