Prof. G. Raghuram, Director, Indian Institute of Management (IIM), Bengaluru, delivered the Graduation Day address at KLS Gogte Institute of Technology (GIT). This was the Second Graduation Day of the College after getting the autonomous tag.
Prof. Karisiddappa, Hon’ble Vice-Chancellor of Visvesvaraya Technological University (VTU) Belagavi felicitated the students. Shri. Anant Mandgi, President, Karnatak Law Society, Belagavi honored the toppers.
Graduation Day address by Prof. G. Raghuram
Dear students, parents and relatives, alumni, faculty and staff, Principal Dr. A.S. Deshpande, Chairman and Members of the Academic Council of KLS GIT, Chairman and Members of the Governing Body of KLS GIT, Prof. Karisiddappa, Hon’ble Vice Chancellor of VTU, Shri Anant Mandgi, President of KLS and Shri M.R. Kulkarni, Chairman of Karnatak Law Society.
It’s a great honor for me to deliver the address during the 2nd graduation day of KLS Gogte Institute of Technology. I am particularly inspired to deliver this address since our institutes’ vision is to be ‘an institution of excellence in technical education and in training individuals for outstanding caliber, character coupled with creativity and entrepreneurial skills’.
Just to complement, our vision at IIM Bangalore is to be a global, renowned academic institution fostering excellence in management, innovation and entrepreneurship for business, government, and society.
Today, the role of entrepreneurship, where educated professionals create jobs towards facilitating economic growth is all the more important.
Towards this, I would like to address the following questions:
1) As the country grows, where are the skill gaps
2) Where would the primary supply towards this skill gap come from?
3) A deep dive into the primary skill gap: infrastructure
As the country grows, where are the skill gaps
There are varying estimates, ranging from 12 crores to 35 crores of incremental skilled human resource requirement over the next five years by the year 2022. The lower figures for a training need of over 12 crores over five years may be more trustworthy, since they are from later and a more reliable source like the National Skill Development Corporation. This would amount to about 2.5 crores per year.
The highest skill gap (including upgradation) is in infrastructure and related areas including construction, road transport, logistics and tourism. This could be about 0.8 crore per year. As they say, 70% of India is yet to be built. The second highest skill gap would be in the broad area of retail, beauty and wellness, and hospitality amounting to 0.5 crores per year. All other sectors including automobiles and education would require about 1.2 crores per year.
In the specific instance of Karnataka, the estimates are an annual supply gap of 1.9 to 2.7 million persons and highlighting the need for skilling requirements to meet demand for different sectors. Karnataka’s requirements are thus about 10 per cent of the national requirement. Of this, 43 per cent of the need is for semi-skilled workers, and 27 per cent for minimally skilled workers. The balance 30 per cent would be for skilled and highly skilled.
Where would the primary supply towards this skill gap come from
The 2.5 crore need for the workforce would come from an annual migration out of agriculture of 0.4 crores, net addition to workforce due to the age profile of 1.2 crores and skill upgradation of unskilled and underemployed workforce of 1.6 crores. Most of the unskilled workforce is in the construction and services sector.
The number of people employed in the agriculture sector has consistently declined from about 25 crores in 2004-05 to 21 crores in 2015-16, ie 4 crores over ten years.
The same supply can be analysed from an urban and rural sourcing perspective.
Thus, we expect 1.8 crores from the rural area and 0.7 crore from the urban area. This puts a great challenge on skill development in rural areas, along with employment creation. If this does not happen, there could be chaotic urbanization in the Tier I and Tier II cities. Even if there is urbanization, it should be directed towards migration to tier III cities, which would actually help in synergistic employment creation.
As of 2011, 31 per cent of the population were in urban areas, contributing to 53 per cent of the GDP with an increasing trend, while 69 per cent of the population who were in rural areas contributed to 47 per cent of the GDP with a decreasing trend. In the rural area, the agriculture sector contributed 18 per cent of GDP with 44 per cent of the population. The balance 25 per cent rural population contributed 30 per cent of the GDP.
We have a situation of distress in agriculture. The productivity of most crops in India is well below global average. Of the bottom 20% of India’s income quintile, 89% live in rural areas. According to a NITI Aayog report, income per farmer is around one-third of the income per non-agriculture worker.
It is thus clear that the value addition per capita is the lowest in the agriculture sector. It is thus important to move people out of agriculture into the non-farm rural sector. This will not only address India’s skill gap requirement, but also improve the per capita income of farmers.
Mr Jayant Sinha, Minister in the Central Government, has been advocating that our development model should be ‘From farm to frontier’, where he says that high value adding industries should be allowed to develop and attract the low value adding workforce.
The increasing penetration of roads (PMGSY) and motor cycle, and then broadband and mobile synergizes well with the possibility of sourcing, retraining and employing underemployed farm workforce in non-farm rural/small town employment.
Sectoral Contribution to Non-Farm Employment
1. Rise in non-farm jobs were more than compensated for the decline in farm jobs
2. Sectors which contributed to non-farm jobs between 2011 and 2015 are Trade and Hospitality (15.6 Million), Construction (14.3 Million), Transport (5.7 Million) and Education & Health (1.6 Million)
Role of Geographical Indications
1. GI acts as a signalling device helping the producers to differentiate their products from competing products in the market and enabling them to build a reputation and goodwill around their products, which often fetch a premium price
2. A total of 320 GIs have been filed in India so far of which 39 are from Karnataka (Mysore Agarbatti, Mysore Silks, Chennapatna toys). A majority of GIs are in the area of Handicrafts (197) and Agriculture (89).
3. “Legal protection to GIs extends to protection of traditional knowledge and traditional cultural expression contained in the products. In doing so, not only are livelihoods protected but also possibilities of employment generation are encouraged. In fact, owing to the premium prices that many GIs command today, there is a possibility of preserving many traditional skills.”
A deep dive into the primary skill gap: Infrastructure
We can take a deep dive into the domain of the primary skill gap, which is infrastructure, and what needs to happen there, both at the policy and enterprise level. The following are some of the important domains in infrastructure:
Construction
Real Estate
Logistics, Transportation and Warehousing
Tourism
Renewable Energy
Digital Technologies (Data Analytics)
Sustainable Technologies
Services (Mobility, Rural EVs, Drones)
Transaction Advisory
Law and Economics (Contracts, Agreements)
As I have already indicated, there is a skill gap need of 0.8 crore per year. Some of the major need areas would be for constructing rural housing, rural roads, toilets, creation of durable assets such as roads, canals, ponds and wells under MNREGA, road projects under Bharatmala, Agri-Infrastructure including Warehousing and Cold Chains and related services.
As an example, Golden Quadrilateral Highway Network construction employed an average of about 2 crores of people at any given time. Such needs would only increase since our road construction and modernisation programmes are on the rise.
To enable the above, underlying rural infrastructure including roads, electricity, telecommunication and broadband, irrigation, housing, drinking water and sanitation needs attention. Once these are in place, second level infrastructure like warehousing, market yards, cold chains and chilling centers, primary health centers, and primary schools, would get a demand driven focus for which subsidy minimising public private partnerships can be brought in.
Way Forward:
• Rural road development should push towards all weather access both at the habitation (15% unconnected) and household levels. Quality of rural roads require special attention both at the design stage (avoid irrigation cuts) and for maintenance
• With the motor cycle becoming an important element of the rural household quality of life, there should be focus on developing even just motor cycle friendly paths at the household level and motor cycle waste transport application
• Electricity coverage targets at household level have reached 92%. However, quality of electricity should be focused on. Availability should be 24×7, with no voltage fluctuations. Solar energy should be a complementary focus
• Rural teledensity was 59% in March 2018. However, lack of mobile ownership may still be a significant issue with many having multiple connections. USOF funds should be used to subsidise the instrument costs. Broadband through BharatNet (a delayed project) is now being implemented with speed. This should be taken advantage of.
• 42% of agricultural land is not irrigated (monsoon fed), leading to low productivity due to single cropping
• Estimates are anywhere upto 8 cr (45%) households are living in ‘kuccha’ type houses, with vulnerability to weather and disasters
• Over 50% of households do not have latrines, and 65% do not have drinking water within their premises
• Quality and impact measures need to be developed explicitly, and measured by third party independent surveys
• Local community should be involved in planning, maintenance, and behavioral change. This will build their sense of ownership. There is opportunity to provide higher value by viewing different types of infrastructures and services in a holistic sense.
Conclusion
Dear graduating students, I conceptualize the key implications of the above into eight domains, each of which has implications for the likes of you to contribute
• Project structuring: (Appropriate bundling)
• Risk assessment and management
• Project financing: (Appraisal, sourcing and engineering including taxes/subsidies)
• Tendering and Bidding
• Agreements
• Project management: (Implementation)
• Service operations and financial management
• Regulatory and institutional framework
I summarise
• The need for the country’s growth will result in skill gaps, much of which has been profiled for the next five years
• The supply for this will largely be the net addition to the workforce due to the age profile and the displaced agricultural workforce.
• To achieve the right equilibrium for development, the job creation focus has to be in the non-farm rural sector.
• To enable all this will be the need for increasing rural infrastructure, which will be the primary absorber of jobs
I hope I have laid out opportunities for all of you from this great institution, which has a legacy of being built by people of the KLS, who cared for growth in the small town and rural segments.
I would like to end on the note of the inspiration provided by the founder of this institution Raosaheb B. M. Gogte. Infrastructure, I am sure was an important element of almost all the business ventures that he was associated with, including mining.
Let me end on the note of the motto of the KLS Gogte Institute of Technology motto ”अमृत तु विद्या” or “Knowledge is eternal”.
I would only like to add a quote from the person who has inspired me in terms of his achievements, in spite of his own challenges. And that is Stephen Hawking, who passed away this year on 14th March. On the idea of knowledge, he said, “ the greatest enemy of knowledge is not ignorance, it is the illusion of knowledge. “