Why Modi’s Make in India will break

Nov 21, 2014

While there is no shortage of degrees, there is a dire shortage of skilled manpower in India

Lets face it, Modi is the new Obama.

Elected to power by a dissatisfied, disgruntled nation, sick of roadblocks and government apathy, a large portion of India has not only chosen him as their leader, but many see in him a messiah. A leader-savior with an old world charm and charisma, an Obamisk swagger, who will deliver us to the promise land of "Super Powerdom".

As India swooned over Obama, nations looking to cash in on India’s 1.2 billion market, have laid out the red carpet for Modi and some have even gone so far as to rework their earlier visa policy. Modimadness is gripping the world and NRIs are packing themselves into huge stadium, chanting "Modi, Modi, Modi", just to see their smooth talking savior in person and Modi doesn’t disappoint.

With every speech he promises change, a better future, an India propelled by her demographic dividend, that can not only compete with the rest of the world, but lead it. "Make in India", "Act East", "Shasak nahi sevak", catch phrases, close but not as good as "yes we can", still leave crowds awe struck and chanting. He is nothing short of an international super star.

Granted, it takes a certain skill set and genius to cash in on a grim situation, but its always easier to promise change and talk hope to a desperate people than to deliver it. When the US was against the ropes, Obama promised America hope, won a Noble Peace Price but then what? Did he deliver? Many, including a large chunk of the US electorate who recently handed over the Senate to the Republicans, don’t think so.

Modi talks big and talks well, but very soon he may face the Obama burden.

Recently, while addressing the Australian Parliament, Modi spoke of hope and transformation.

“Today, we have a government with a clear majority after thirty years. From the remotest village to the biggest cities, there is a new high tide of hope in India; a new energy.

It is the energy of our youth – the 800 million people below the age of 35 – eager for change, willing to work for it – because, now they believe that it is possible. That they can make it happen. It is this force of transformation that we will unleash.”

In an elegantly delivered paragraph that was met with cheers and applause, our elected messiah sidestepped the very harsh reality of India’s demographic dividend; it’s a ticking time bomb.

Yes, India is a young country and by the end of this decade, the average age of the population will be 29. In comparison, in China and America it will be 37, 48 in Japan and 45 in Western Europe. This demographic dividend means that by 2040, a quarter of the globe’s incremental increase in world working population is set to occur in India and the IMF suggests that this youth bugle can potentially produce an additional two per cent per capita GDP growth each year for two decades. So it seems that the prime minister is onto something, our demographic make up is the key to our future success.

But there is a hitch. There is another side to this truth, not revealed to the Australian parliament that makes "making in India" a very difficult proposition.

The problem with India’s young work force starts very early. While the Sarva Shiksha Abhiyan boasts of near universal enrollment in primary education (96 per cent), there is in fact an 80 per cent dropout by class XII, with only 15 per cent applying for higher education. So of the 27 million kids who are enrolled in primary school each year, only 5.4 million make it to Class XII. What compounds the dropout problem is the fact that Right to Education has brought in a system of automatic promotion till Class VIII, which means there are no tests or qualitiy checks till that point. What is scary about this is that 40 per cent of India’s school going youth dropout by Class VIII and join the work force, without every facing a quality check on their education.

This should worry India and Mr Modi, because according to a report by ASER, 60 per cent of children in Class V cannot read at a Class II level and 75 per cent cannot complete simple division sums. So essentially, each year we are adding millions of semi-literate youth to the countries workforce and pumping them full with aspiration, because India is shining and they too want to stand in the light. But aspiration without the ability to achieve it (only 10 per cent of Indians (Ages 15-29) have received vocational training) is a recipe for disaster.

Yes, Mr Modi has been at the helm of affairs for only 6 months and this situation has been 60 years in the making, it’s clearly not his fault. But given that in these last 6 months the educational reform has been more about pushing Sanskrit and certain portions of "history", I’m worried. But hypothetically, lets assume Modi is able to keep all 27 million kids in school all the way through, what will he do about the teachers?

As a result of RTE’s mandate of universal education, India needs about 6.3 million teachers to cater to children in the 6-14 age group. That means you need to recruit roughly 2.5 lakh teachers a year, but who wants to be a teacher today? While the countries who rank in the top ten of the worlds leading school educational systems recruit their teachers from the brightest 5 per cent to 10 per cent of their graduates with starting salaries equal to those of an engineer, the top tier of Indian graduates do not become teachers. As a result, of the one lakh teachers who appeared in the post-RTE universal eligibility test, designed to filter out unqualified teachers, only 1 per cent passed. So from where will India produce these 6.3 million teachers, especially when there is only a 15 per cent gross enrolled in higher education.

But India is the land of engineers and IT professionals; surely they will fast track us onto the path of success. Well, not really. In the last few decades, India has seen a mushrooming of engineering, MBA and IT institutes, given that they are the new go to jobs, but many of them are churning out unemployable graduates. So much so that companies like Infosys and TCS have to invest large sums of money to retrain graduates before putting them to work. Though many like to forget it, India has not been immune to the global slow down and while some 200 management schools have shut down due to poor placement, of the 1.5 million engineering students in India, over 70 per cent are unemployed and close 75 per cent of IT graduates are unemployed.

While there is no shortage of degrees, there is a dire shortage of skilled manpower. But the factory line of Indians entering the job market is not stopping, and each year we need to create 20 million jobs (factoring in the backlog), that’s 400 million new jobs in twenty years and if Modi wants to make in India, creating an individual job in the manufacturing sector costs close to Rs 19 lakhs.

The present conundrum is not a Modi creation, he inherited it, but he is playing with fire. Today, he is the Messiah, the toast of the international community, he says the right things, plays the right role but solving India’s education and job creation riddle is not an overnight job and hope in politics is fickle. The anger of the youth may have been temporarily tempered, but unless they see results their anger, which is very palpable on the streets, will find an outlet to boil over. The dreams and aspirations of the youth, 70 per cent of the country, are riding on his every word, so Mr Modi, "tread softly, because you tread on my dreams".