India seeks to become an advanced economy by 2047 but it is important to address preconditions at the level of human development to realise this aspirational objective. The East Asian miracle economies like South Korea — that made this transition from developing to developed economies — had a high baseline of human development which enabled them to grow rapidly for long periods of time. Before its take-off, South Korea, for instance, saw huge investments in education that improved literacy and schooling. The challenge is indeed daunting as the average Indian worker has less than eight years of education, much less than the 14 years of a typical worker in China.

Only 5% of India’s workforce has received formal skill training as against 80% and 96% in countries like Japan and South Korea. Although India has the advantage of a predominantly youthful labour force, this demographic dividend can turn into a curse if they are not gainfully absorbed in a fast-growing economy. Clearly, the overriding focus must be on improving human capital and enhancing skills as rightly emphasised by former RBI governor Raghuram Rajan in a recent conference at the George Washington University.

The big question is, what must be done to raise the threshold levels of human development? A useful means to integrate the youth into the labour market is through skill development measures like apprenticeships. This meets the requirements of India Inc by utilising existing facilities without entailing additional spending on separate training infrastructure. But despite being cost-effective, this scheme hasn’t taken off although the Apprentices Act was passed in 1961 and the Apprenticeship (Amendment) Rules, 2019, mandated establishments having more than 30 workers to engage apprentices in a band of 2.5 to 15% of their total strength every financial year. Their share is only 0.1% with 600,000 formal apprentices in a workforce of 570 million while........

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