‘Skill India’ Won’t Succeed Without Inclusive Cities

7 October 2015
ABOUT THIS Perspective

With most of India's job-hungry youth residing in rural areas, and most of its job creation happening in cities, the country must design its cities to cope with "and welcome" internal migrants.

This piece is part of an “Urbanization and Jobs series hosted on the JustJobs blog.

India has long understood the critical importance of upgrading the skills of its workforce. While the previous Congress-led government set up the National Skill Development Corporation to boost vocational training, the current government under Prime Minister Narendra Modi has launched the ambitious Skill India initiative, which aims to train 400 million people by 2022.

The social and economic imperatives behind such initiatives are plainly evident: a vast majority of Indian workers are stuck in low-paid, low-productivity jobs – due in part to a lack of skills or the formal recognition of their skills. If India plans to accelerate its economic transition, speed up growth, and invest in higher-productivity sectors, it needs a workforce to match those aspirations.

But a huge gulf persists between understanding the skilling imperative and solving the problem.

The gap is a result of India’s broken urban governance policies, which are more about keeping people out than letting them in. With most of India’s job-hungry youth residing in rural areas, and most of its job creation happening in cities, the country must design its cities to cope with – and welcome – internal migrants.

Everything from land-use policies that send rents soaring to pitiful pedestrian infrastructure is anti-migrant in Indian cities. Recent empirical research by Amitabh Kundu and Lopamudra Ray Saraswati demonstrates that Indian cities have “become less accommodating to the poor” over time.

Consider, for instance, that rents in a “planned colony” – the only neighborhoods that receive (mostly) adequate public services – are at least INR 5,000 to 10,000 (USD 75 to 150) per bedroom per month in a city like Delhi. Salaries, meanwhile, for newly trained youth in hospitality or retail sectors are as low as INR 7,000 or 8,000 per month. The only option for migrant youth is to live in unplanned, informal settlements (“slums”), where infrastructure and services are severely lacking and which the government and the urban middle class regard with hostility.

In other words, ‘Skill India’ expects its newly trained young people to move to cities where they will immediately become second-class citizens.

The result? Extremely low retention rates. Unsurprisingly, most of those who enter training programs and get placed at low-paying urban jobs abandon them quickly. A Overcoming the Youth Employment Crisis: Strategies from Around the Globe,” describes similar trends.

‘Skill India’ faces major challenges in terms of training quality, market alignment, and providing the right incentives to trainees and training providers. But even if these challenges are overcome, urban India’s hostility toward migrants could alone render the program a failure.