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Skill Upgradation and Employment Generation Dr.Vijay kumar,I.A.S. Secretary, Municipal Admn Govt of Andhra Pradesh, India 1 1 India- A high growth economy • Average annual growth from 1997 onwards at more than 7% • From 2001 to 2011 average quarterly GDP growth rate at 7.45% with a peak of 11.8% during December 2002. • GDP now stands at 1729 billion US dollars • India now stands 4th in world in GDP measured in Purchasing Power Parity However……….. 2 Since the recording of high economic growths, India’s poor have reduced in numbers by ten percentage, but …. • Still 22% of population are below poverty line. • Of the 238 million poor, 68 million reside in urban areas • World Bank estimates – Nearly 42% of India’s population lives on less than $ 1.25 per day – 3 out of every 4 Indians live on less than $ 2 per day, This is because of 3 A 9% Growth Economy needs Skilled Manpower – the Economic Growth Challenge … • Agriculture capacity to absorb human resources limited • 54% of population dependent on agriculture, but contribution of agriculture to GDP is around 18% • Need for transition of labour from farm to industry • Incremental HR requirements till 2022 for top 15 sectors is estimated to be 178 mn • 68% of requirement is for skilled entry-level-operators - education levels of high school and below KEY SECTORS Incremental Human Resources (million) Building, Construction, Real Estate 47.31 Auto & Auto Components 35.20 Organized Retail 17.34 Textiles 16.79 Tourism, Travel 12.86 Healthcare 12.70 Education & Skills Development 5.80 IT & ITES 5.30 Leather 4.64 Gems & Jewellery 4.60 BFSI 4.49 Furniture & Furnishing 3.34 Electronics/ IT Hardware 3.22 Media & Entertainment 2.99 Source: NSDC Report on Human Resources and Skill Requirements in various sectors (2022) 4 There is Increase in Unemployment, Despite the growth in jobs • Employment generation over 1999–2000 to 2004–2005 grew on average by 2.8% per year) • But, unemployment rate increased from 7.3% in 1999–2000 to 8.3% in 2004–2005, due to quicker labor force growth • This is because of the large number of people being turned away from farm sector because of the large scale hidden unemployment in this sector towards other sectors. 5 Further there is a large unemployment in manufacturing sector • According to the 2001 Census, 71% of the urban workforce falls in the category of “marginal workers.” • Further there is a huge shortfall of skill base for other workers in manufacturing and service sector which leads to poor remuneration • And so these employed workers also continue to be poor. 6 The Urban Poor are Stuck in a Vicious Poverty Trap Due to the Lack of Employability Poverty Uncertain income / no social security No education /school drop out Low / unrecognised skills Most of the labour force is not employable − Only 6% of the urban labour force aged 15-29 yrs have received any type of vocational training (NSS) − 67% of the work force is either illiterate or primary school level educated, making them ineligible for formal vocational training − Even those who have skills have developed them on the job and are not formally certified, precluding them from the organised sector 7 Thus Market-Relevant Skill Development is the only Means to Break the Poverty Cycle Marketrelevant Skill Development No education /school Poverty drop out Improved, stable Organised standard sector of living employment and social security Courses to be designed to meet the specific needs of the industry, across sectors Employment linkages with organised sector Short-duration courses to improve accessibility to trainees No artificial educational requirement barriers Formal certification Employment in organised sector to form the basis for financial inclusion and access to social security 8 The Government has set ambitious targets for skill development in the country National Skill Development Mission Target : Skilling 500 million Indians by 2022 350 million To be trained under grant funding by Central Government Ministries and State Governments 150 million To be trained by NSDC through PPP 9 The Planning Commission has identified 20 High Growth Sectors for achieving socio-economic objectives…. Automobile & Autocomponents 2. Banking/Insurance & Finance Services 3. Building & Construction Industry 4. Chemicals & Pharmaceuticals 5. Construction Materials / Building Hardware etc 6. Educational & Skill Development Services 7. Electronics hardware 8. Food Processing / Cold Chain / Refrigeration 9. Furniture & Furnishings 10. Gem & Jewelry 1. 11. Health Care Services 12. ITES or Business (BPO) Process Outsourcing 13. ITS or Software Services / Products 14. Leather & Leather goods 15. Media, Entertainment, Broadcasting, Content Creation & Animation 16. Organized Retail 17. Real Estate Services 18. Textiles, Apparel & Garments 19. Tourism, Hospitality & Travel Trade 20. Transportation Logistics, 10 Warehousing & Packaging etc. 11 State Socio-Economic Profile … • Population : 84.6.million • 67.66% literacy • 31.0 million population in the age group of 15-34 • BPL Population – 12.7 million – 6.5 million rural & 6.2 million urban • GSDP for 2010-11 at Constant Prices is Rs. 3,710 billion. • Annual Growth rate of GSDP at constant prices: 8.89% • Planned annual economic growth rate of 9% during the 11th Five Year Plan (2007-2012) Key Sectors Approx. Size in AP Rs. Cr Growth Rate (CAGR) Drugs and Pharma 17,400 13.5% IT and ITES 16,000 25% Construction 15,000 15% Healthcare 12,000 18% Fin. Services 11,000 13.3% Engineering 11,000 15% Textiles 10,750 16% Agro & Food Processing 9,300 10% Tourism 8,500 9.5% Chemical and Fertilizers 8,400 8% Mines & Minerals 7,800 11.5% Paper 2,400 8% 560 12 24% Biotech Quantitatively the Education & Skills Training Infrastructure in the State is less than adequate • • • • • • • Elementary, UPS & High Schools : 97,557 Govt. Industrial Training Institutes (ITI s): 131 Polytechnics (Govt. & Private) : 200 Junior Colleges: 4,264 Degree Colleges : 1,879 Engineering Colleges : 540 Medical Colleges : 50 Except in the Primary School and Engineering Colleges segment, the number of institutions in all other segments is less than the requirement 13 The work force in A.P suffers from • Chronic underemployment because of lack of skills. • Huge numbers of marginally employed in services and manufacturing sector • Huge unemployment in urban areas because of migration to cities for better oppurtunities • Lack of oppurtunities for skill upgadation 14 Vision and Mission of GoAP Vision :- All urban poor families To have: improved quality of life By accessing: services from all organizations Through: own strong self reliant and self managed institutions. Mission:To eliminate: poverty, vulnerability and improve their quality of life By providing: Income generating and sustainable livelihoods. Implementation mechanism Mission for Elimination of Poverty in Municipal Areas. (MEPMA), an independent organization working on a mission mode. 15 15 Operational Area URBAN AREAS IN THE STATE Total proposed 149 31 Total Urban Popn. – 28.3 mn Total Slums - 7520 BPL Population – 8.9mn BPL Households – 1.99mn 16 The strategy adopted • Market scans conducted to identify the opportunities available • The skill set required for such job oppurtunites identified • Persons requiring the jobs identified • Agencies for imparting training in these skills identified • Training modules designed and implemented to these identified job seekers through identified agencies 17 High Growth Potential Industries/ Sectors in AP High Construction Tourism Employment Potential Financial Services IT & ITES Textiles Chemicals & Fertilizers Health Care Engineering Drugs & Pharma Biotech Agro & Food Processing Paper Mines & Minerals Low Low Competitive Positioning High 18 Employment generation – AP Interventions • Skill Training for Employment Promotion amongst Urban Poor( STEP-UP) • Urban Self Employment Programme (USEP) • Urban Women Self- help Programme (UWSP) • Urban Wage Employment Programme (UWEP) • Bank linkage – Micro finance to Community based organizations • Social infrastructure under Integrated Housing and Slum Development Programme (IHSDP) of JnNURM. 19 Skill Training for Employment Promotion amongst Urban Poor( STEP-UP) Identification of trainee • Identifying the candidates through community based organizations. Training: • Imparting customized skill trainings based on Market scan. Certification: • Assessment of each trainee. • Engaged reputed organizations from the industry. Placement: • Minimum salary assured to the placed candidates. • Establishing industrial network. Monitoring: • Web based monitoring of selection of candidates, trainings, attendance and placements. http://apmepma.gov.in • Refresher trainings every 3 months for one year. • One year tracking of the candidate. Achievement: • For the last 4 years trained 0.14 mn and placed 0.10 mn • Approximate earnings around Rs.6.3 billion per year. 20 Process of training survey for identifying candidates for training Training batches Market scan of companies Identification of skills required Training courses designed Identification of training agencies Establishment of training centers Training placement 21 Industry Manpower Requirement Form 22 Unemployed Youth Registration Form 23 Unemployed Youth Registration Form – Cont.. 24 Urban youth at learning and working Hospitality IT Enabled Services Hotel Management Accounting 25 Trainees registering with the biometric machines 26 Photo identity of the trainees 27 Urban Self Employment Programme (USEP) Target : Individual urban poor Provision: For setting up gainful self employment ventures and Micro Enterprise. Financial outlay: up to Rs.200,000 per unit (including 25% subsidy) Achievement : 34,005 units so far Target (2011-12 ) : 10,000 units 28 Urban Women Self Employment Programme (UWSP) Target: Women self help groups (SHGs) Aim: Setting up of sustainable industrial/business units. Objective: To improve SHGs’ economic and managerial capacities. Financial outlay: up to Rs.900,000 including 35% subsidy. Target (2011-12): 2,500 units 29 Urban Wage Employment Programme (UWEP) To create: Assets to the urban community and to provide employment to urban poor. Assets : Community Resource Centers, Roads, Drains, water supply pipe lines Objective: Assets would be created and owned by the community. Each work Comprising : Not less than 40% of the labor component and balance will be material component. Financial Assistance: Up to 51 lakhs per project Achievement: Construction of 352 Community Resource Centers 30 Self Help Group - Bank linkage (Micro Finance) Formation of Community Organisations For socio economic development Empowerment of women. Inculcating thrift and credit among themselves. Strength: 250,000 groups with 2.5 mn members Corpus: Rs 0.474 billion Extending Bank Linkage: To meet immediate financial needs To start income generating activities Bank loan ranging from Rs. 75000 to Rs. 500000 per SHG Achievement: Rs.5 billion so far and stood first in the country in SHG Bank Linkage. Target for 2011-12: Rs.1.6 billion Total Financial Inclusion Model (TFI): Providing assistance to the SHGs for debt swapping and to enhance their economic base. Ultimate Aim: To relieve them from the clutches of money lenders and private Micro financial institutions. 31 Social infrastructure under IHSDP of JnNURM • As part of the housing projects, following social infrastructure created to cater the needs of urban poor under Integrated Housing and Slum Development Program (IHSDP). -Livelihood centers -Community halls -Elementary schools -Anganwadis (Play schools) -Public Health centers -Informal Markets -Rickshaw sheds -Multi functional utility centers. • So far constructed 253 social infrastructural facility centers with an amount of Rs.533 million 32 Impact on urban poor • Placement linked skill trainings • Collectivization of Urban poor and Empowerment of Women • Self Managed Vibrant CBOs of urban poor to demand the services. • Transformation of urban society is catalyzing the growth of the state GDP. • The Public Private Partnership arrangement leveraging the Resources - Finance, Trainee and know how – is a novel and sustainable way of livelihood promotion. 33 Way forward • Increased numbers for training for covering all urban poor for skill based training • Covering all urban households for gainful employment and self employment • Improving skill base at all levels for improving productivity of work force 34 Thank You 35