1) The document discusses India's need to transition its workforce from agriculture to manufacturing and services to increase productivity and reduce poverty. 2) It proposes introducing a skill voucher program where the government provides vouchers that individuals can use to obtain training from private or public training institutions, incentivizing higher quality training. 3) Additional policy recommendations include liberalizing labor laws and agriculture to encourage investment and competition, which would shift more employment to industry and increase wages, attracting more workers to obtain new skills.

1. Demographic
Dividend
through Skill
Vouchers
By
MananVyas
Shivani Singh
Abhisek Ghosh
Sambodhi Sarkar
Rajas Saroy

2. The Problem
• Most developed nations go through a stage of transition whereby the working
population shifts from the agricultural sector to the manufacturing sector the
service sector.
• India has clearly missed this transition. The population is instead moving from
agricultural sector to the service sector with less than 20% of the population
being employed in the manufacturing sector.
• The agricultural sector is clearly over-burdened with excess human resources
and is unable to add enough value per-capita, subjecting millions to poverty.
India needs its population to shift away from agriculture towards the
manufacturing and service sector where the will be able to add better value.
• Liberalisation of regressive labour and industrial jobs is the first stage in this
process.
• The most important step however is: Increasing the employability of the
labour force through skill development programs.

3. Government
• The current model:
Government run
training institutions
Funding
Poor outcomes,
out-dates training
methods
Lack of Incentives
Lack of Credible
training options
Untrained
Workforce

4. Government
Alternate Model
Individuals
Funding throughVoucher
Private and Public
Sector Institutions
compete for
students backed by
purchasing power
Economic Incentive through the
Voucher
Trained
Workforce
Voucher handed over to
government and cash received
by training centre

5. • Lack of incentives means that government institutions are not effective as
training institutions.
• Moreover, the number of government run training institutions is not adequate.
The private sector can bring in the following:
Private Sector
Competition
Choice Will deliver exactly what
customer wants
High quality

6. Introduce Skill
Vouchers
Policy Measures
Open up agriculture
and industry
completely. Encourage
investment and
competition
Liberalize and
Introduce Foreign
Competition
Increased
corporatisation of
agriculture and
increasing
opportunities in
industry
Shift in employment
Higher wages in
Industry will attract
more demand for
industrial jobs and
industrial skills
Highly trained workforce
engaged in Industrial
Labour

7. • Current government policies are not conducive to large scale investment in either agriculture
or industry.There are a variety of laws that have dramatically increased the barriers to entry.
These include the Factories Act 1948, the EssentialCommoditiesAct 1955, the Agricultural
Produce Market CommitteeAct, the land ceiling acts and many more.
• Reducing barriers to entry and a stable policy regime must be the center-piece of government
policy. Creative destruction as envisioned by Joseph Schumpeter will play a big role. Large
scale corporate investment in farms and farm machinery is also likely to cause large scale
unemployment for farm workers.This incentivises them to participate in the government’s
voucher offer.They can go to training centre and secure the higher order skills that are
required for a dramatically changing labour market place.
• It is necessary for the government to have the political will necessary to carry out these
reforms. In most rich countries of the world, the population employed in agriculture is often a
mere 2-3% of the total population. India’s human resources are being wasted in an area in
which they are not added enough value. India’s per-capita productivity is extremely low.
Therefore increasing investment in machinery is likely to increase per-capita labour, allowing
corporate entities to pay higher and higher wages. However for wages to rise, the demand for
labour must rise correspondingly.This requires that the country attract a massive amount of
investment, both foreign and domestic, on an annual basis.

8. ThankYou