Data suggests that there will be 29 million skills in deficit by 2030. To address this skills shortage, recruiters are shifting their focus to hiring professionals with the ability to adapt to changing roles. Several new-age jobs could not find a suitable match due to skill gaps across sectors. According to the International Labour Organisation (ILO), India is staring at a 29 million skill-deficit by 2030.

Owing to the skill shortage, 53 per cent of Indian businesses could not recruit in 2019. According to ILO, in the job profile of development operations manager, 63 per cent openings remained vacant due to lack of skill-sets.

India’s demographics indicate that the majority of its population will be composed of youths and, as such, become a major supplier of human resources to the global economy. According to data collected by the Ministry of Statistics and Programme Implementation, Government of India (Social Statistics Division), India has a relative advantage, at present, over other countries in terms of the distribution of youth population. As per India’s census, India has the largest population of youth in the world spanning a whooping 600 million youth as of the year 2018. India’s youthful population will become its most prized asset. However, the problem of a skill gap in India is making prospects less enticing. Unemployability seems to be a much bigger threat to India than unemployment.

If the skill gap in India continues on its current trajectory, most industries will be plagued by about 75-80 percent skill gap issues. This means about 20-25 percent will be skilled enough for the available jobs and labor employability will be at its lowest.

To better understand the adverse economic implications of the skill gap in India, one needs to understand the meaning of a skill gap. In simple terms, the skill gap occurs when there is a mismatch between the demand and supply sides of the employment market. It is the persistent disconnect existing between the skills needed by an organization and the present capabilities of its workforce. This presents a difficulty for companies to grow or maintain competitiveness because the workforce does not have the skills to drive businesses forward.

The skill gap in India remains a major problem impeding the growth potentials of the economy. The International Labour Organization (ILO) is of the opinion that  India is staring at a 29 million skill-deficit by 2030. Accenture’s projection is that the skill gap in India will cause a loss of $1.97 trillion in terms of gross domestic product promised by investment in intelligent technologies over the 10 years if it is not controlled.

There are many factors that are attributed to causing the skill gap in India, however, experts identify the failure of the educational system as a primary cause of the problem. They point out that schools in India are not teaching students the skills necessary to succeed in today’s job market. While the basic concepts and principles are present in the college curriculum, there exists a gap in the teaching and learning pedagogy being followed. With 15 million youngsters entering the workforce each year, corporate India and research institutes seem to agree that 65-75% are not job ready or are unemployable. Research has it that the problem of the skill gap in India boils down to the low levels of youth employability across the country.

As schools are not teaching the right skills required to reduce the skill gap in India, companies also are apathetic towards providing job training for candidates. In India, little formal in-firm job training occurs, although this is partly because most small firms dominate the informal sector. This notwithstanding, only a small percentage of the manufacturing firms in India provide in-firm job training, which has contributed further to an increasing gap between skilled and unskilled labor in India.