Sustainability of Public Financing of Skill Development Programs in India

Abstract

The development in a country like India faces several deadlocks. One of these challenges is the lack of, or total unavailability of Skill Development programs, or improper infrastructure to deliver a quality program of one such kind. This prevents sections of the skilled workforce from accessing formal employment opportunities, utilizing their experience further taking up educational courses, and benefitting from other career progression opportunities available through the formal training system. While in the absence of any skill Development or skill improvement program, the unemployed population has been left at the mercy of fate and the efficiency of the working force is limited. In such a scenario, the potential of the people of the country is left untapped, and thus, wasted Therefore Public financing for skill development has become the need of the hour. However, the current skill development system in India is mainly financed by the government, which may not be sustainable and the most efficient way of spending public money. The purpose of this paper is to argue that this kind of large budgetary allocation from the government for skill development programs may not be sustainable in the long term or medium term due to increasing fiscal constraints of the state and its capacity to fund these programs will come under constant threat from other developmental priorities. In support of the argument, a causal analysis of the current skill development system in India is presented and a need for further study in the areas of cost-benefit analysis of the current model of public financing of skill development is suggested with the need to reimagine the current policy of public financing based on evidence from other countries. This Analysis is based on secondary sources of data and an extensive literature review of the subject.