Role of Education and Skill Development for Sustainable Development

The Indian economy is widely expected to grow at sustained high rates over the next few decades and emerge as the second largest economy by 2050. These robust projections have much to do with the demographic profile of the country. India is slated to have one of the youngest populations, with the bulk of the population figuring in the working age. However, in order to utilize this „demographic dividend* effectively, India needs to impart adequate and appropriate skills to its workforce. The education system churns out students that are not immediately employable and skill up-gradation on the job is low; implying that a large section of the currently employed labor possesses outdated skills. The current skill training setup, comprising of ITIs and Polytechnics, caters to only 2.5 million people. This further compounds the demandsupply gap. Market outcomes are not favoring the expectations of the labor force. While 56 percent of the higher education institutes are devoted to arts, science and commerce, medical colleges, engineering and technology colleges and polytechnics comprise ten percent, seven percent and six percent of total institutes respectively. The dominance of general education has prevented the bulk of the population from acquiring skills required by the manufacturing and service industries. The attempt of this paper will be to reconcile the empirical study of the education sector with the neoclassical literature on human capital as a determinant of sustained growth with special focus on skill development.