Higher & Vocational Education in India

Seminar Paper, 2011

29 Pages, Grade: 1,3


Table of Contents

Index of Illustrations

1. India’s Education Challenge

2. Demand on the Labor Market

3. India’s Higher & Vocational Education System

4. Problems in India’s Higher & Vocational Education
4.1 The Deterioration of Quality
4.2 Lack of Investment
4.3 The Debate over Reservations
4.4 Constraints of Vocational Education
4.5 Dependence on the State

5. Potential for Improvement
5.1 Financing India’s Higher and Vocational Education System
5.1.1 Student Loans as the Solution?
5.1.2 Privatization of Education Institutes
5.2 Reforming the Vocational Education System
5.3 Cross-National Cooperation

6. The Indo-German Cooperation in Vocational Training

7. How to Educate a Skilled Workforce


Index of Illustrations

Illustration 1: Demand for skilled labor

Illustration 2: Education and skill development capacity in India (2010)

Illustration 3: General perception about private higher education in India

1. India’s Education Challenge

The world of the twenty-first century is witnessing a plethora of phenomena such as the global influence of capitalism, market deregulation, internationalization as well as a demand for skilled workers. While these circumstances portray major economic, cultural and social challenges (Rojewski, 2009, p.19), the higher and vocational education sector is also stipulated to adjust to those changes.

According to Beddie (2009, p.6) “[l]earning is a driver of knowledge-based economies”. In order to enhance progress and prosperity, India faces a huge challenge in terms of producing human capital, which needs to be employable as well as able to adapt to a rapidly changing economy (Ibid., p.6).

Within the last decades, India’s largely agricultural-oriented economy has converted into an urban service and manufacturing industry. Heretofore, its higher and vocational education system has failed to respond to that shift (Agarwal, 2010). In spite of India’s young population, two-thirds of all Indian enterprises have to cope with a shortage of skilled workers (Deutsche Bank Research, 2011, p.1). This poses a demanding challenge for governments as well as for non-governmental organizations. As Ansari (1991, p.131) declared:

“If a country is unable to develop the skills and knowledge of its people and to utilise them effectively in various socio-economic activities, it would be unable to develop anything else. […] [T]he promotion of human resources by way of strengthening education system […] is a sine-qua-non for national development.”

With respect to the vital role of education, it is pertinent to ask: How can India improve its higher and vocational education system in order to meet the needs of the labor market? Therefore, this paper will briefly enlarge upon the current labor-market situation in India, before outlining the higher and vocational education system. As those structures interact and are needed to understand the mismatch between the available pool of labor and the demand on the job market, they cannot be looked at separately. Furthermore, this essay will discuss the major problems of Indian universities as well as those of the vocational education system. Subsequently, the paper aims to analyze the potential for improvement in both sectors. After elaborating on the Indo-German cooperation in vocational education as a role model for cross-national cooperation, it will state a short conclusion on how India can educate a skilled workforce.

2. Demand on the Labor Market

The effects of India’s restrictive economic policy, pursued before 1990, are being felt to this day. Growth rates in the manufacturing industry have been achieved without an expansion of the workforce. Hence, India had to face a jobless growth. India’s economy is in a quandary as it cannot make use of its natural comparative advantage of labor-intensive sectors. The situation is further exacerbated by the lack of a skilled workforce. According to government sources, only 5 percent of the people in working age have occupational qualifications. Of all persons under the age of 30, just 2 percent can claim a formal vocational training. However, the biggest challenge lies in the demographic structure as around half of India’s population is younger than 25 years and 12 to 13 million adolescents are leaving school each year. If the population continues to grow like this, India will have around 1.45 billion inhabitants by 2025 (Männicke, 2011, pp.10–11).

On the one hand, it has been estimated that approximately 500 million people will need to undergo a vocational training by 2020. On the other hand, the current vocational capacity is only around 4.2 million people per year or about 50 million by 2020, which signals a gap of 10 times over the next 10 years (McKinsey&Company, 2009, p.4). The following table illustrates the situation:

illustration not visible in this excerpt

Illustration 1: Demand for skilled labor (McKinsey&Company, 2009, p. 11)

Nevertheless, the shortage of skilled workers does not only refer to numbers as most employers noticed poor practical and elementary knowledge of graduates (Ibid., pp.10–11). Therefore, companies suffer low productivity and product quality, especially at the beginning of an occupation. Whereas most employees in specialist and managerial posts have completed a reasonable education, staff in production is lacking basic skills. For example, according to the census of population in 2001, 34.6 percent of all Indians are illiterate, of whom the majority carries out simple work in manufacturing. Many do not have a rudimentary vocational training and barely speak English (Holtbrügge & Friedmann, 2011, pp.146–147). This is based on the fact that very few of the insufficient training places are available for early school leavers. Thus, people of low educational attainment do not get a chance to enhance their vocational skills in the formal training system, due to educational entry requirements and the long duration of courses. Moreover, the lion’s share of new jobs presumably comes from the unorganized sector which employs up to 93 percent of the Indian workforce. Nonetheless, most training courses are tailored to the needs of the organized sector (Directorate General of Employment & Training [DGE&T], 2007).

Therefore, India must adjust its education system to the features of the new global environment. In order to become a knowledge economy, it is required to keep developing its human capital as well as educating workers to contribute to its growth and competitive capacity in the world economy (Dahlman &Utz, 2005, pp.47–48).

3. India’s Higher & Vocational Education System

Nilekani (2010, p.316) argued that

“[India’s] higher education system has become inert and incapable of adapting to a rapidly evolving economy, and even its best central institutes [...] are in danger. Their weaknesses have become particularly critical with the rise of the knowledge economy, and as India's legions of youngsters enter institutions that seem less and less capable of giving them what they need.”

This quotation demonstrates the deplorable state of affairs regarding the higher and vocational education system in India.

There has been a rapid expansion in higher education, from 20 universities and colleges in 1947 (Ibid., pp.320–321), to 355 universities and more than 20,000 colleges in 2009 (Indiresan, 2009, pp.171–172).

Each year, approximately 12 to 13 million school leavers and dropouts are flooding the job and training market in India. This is countered by a training capacity in higher and vocational education of only 3.4 million (Männicke, 2011, p.15). The following table gives an overview about the numbers of India’s diverse education institutes:

illustration not visible in this excerpt

Illustration 2: Education and skill development capacity in India (2010) (Männicke, 2011, p.16)

However, despite high numbers in enrollment, college admissions for higher education constitute not even 10 percent of the relevant age cohort (Indiresan, 2009, pp.171–172). Hence, according to Nilekani (2010, pp.320–321), this growth in higher education is an “empty victory”, as unemployment among graduates is the highest by contrast with less educated adolescents. Therefore, despite the fact that higher education is quite small as compared to India’s population, it is large with respect to economic demand (Indiresan, 2009, pp.171–172).

In contrast, whereas the size of Indian higher education system is enormous, the pool of skilled workers is relatively low (Kapur &Mehta, 2007, p.49). As Indiresan (2009, p.178) pointed out:

“The country is still so poor that most people [...] ask for more, not for something better. Policy debate in India is about raising enrolment rations, not improving quality, to produce more graduates and not quality graduates that are employable.”

The current crisis situation reveals that, apart from the few excellent universities, median higher education establishments have become incompetent in preparing students for the labor market. Hence, graduates are desperately seeking for work (Kapur &Mehta, 2007, p.49). According to a study, 75 percent of India’s graduates were unemployable for the occupation they were allegedly trained to do. This lack is most noticeable in the vocational system. As almost all of the approximately 7,000 vocational institutions in India are in the public sector, they have not responded to the needs of new knowledge- and skill-intensive industrial jobs. For the private sector, setting up vocational schools is not lucrative enough, except for engineering and medicine. In fact, the relative supply of laborers with vocational skills has decreased since the 1990s, even though it is estimated that 90 percent of jobs require some vocational skills. This is due to the fact that students strive for a career in a white collar job and choose “substandard graduation or engineering courses, getting degrees of little value and with little chance of employment” (Nilekani, 2010, p.326), while they could have climbed the career ladder through vocational training, what they consider as low-prestige work (Ibid., pp.325–326). Nevertheless, the vocational education system is at present not able to meet the demand on the labor market as it is mainly institution-based, builds on outdated curriculum and most of its students have serious deficiencies in their basic knowledge (Beddie, 2009, p.9).

As Agarwal (2011, p.4) argues:

“Due to such discrepancies, universities and colleges churn out a growing number of unemployable, general studies graduates. Mounting skills shortages coexist with rising graduate unemployment and underemployment. […] The country’s current low wages, growth rate, and size can create many jobs across the skills spectrum, but merely putting more people into universities and colleges can exacerbate the situation unless the demographic expansion is directed to meet the country’s skill needs in an integrated manner.”

Consequently, India’s limited vocational system suffers from poor demand due to low quality and prestige, while the higher education sector is not able to equip its students with the skills required by the employment market (Ibid.).

4. Problems in India’s Higher & Vocational Education

4.1 The Deterioration of Quality

The rapid and unregulated expansion of universities and colleges over the last decades has happened at the expense of quality. Even though some institutions, such as the IITs, the Indian Institutes of Management, the Indian Institute of Science, the Tata Institute of Fundamental Research and the National Law School of India University, have maintained high standards, there is a general decline in quality, which is most obvious at state institutions. As Jayaram (2007, pp. 77-78) pointed out: “[t]he deplorable physical facilities and the woefully inadequate libraries and laboratories have earned many institutions the sobriquet academic slums.” Certainly, this dilemma is mainly due to a lack of financial support in higher education (Ibid.).

However, it is very unlikely that strong investments by the states will raise the quality in India’s huge number of colleges significantly. For the majority of institutions, any hopes, that they will ever meet world standards, are futile. As their departments are almost destitute, they can only churn out poorly educated graduates (Indiresan, 2009, p.175).

Hence, there are various other factors that contributed to the deterioration of quality in tertiary education. Firstly, even the minimum requirements for the appointment and promotion of academic staff are contravened. Secondly, the limit number of working days is not covered, the calendar of scientific activities merely exists on paper, and the administration has de facto collapsed (Jayaram, 2007, pp.77–78).

In addition, the unreasonable focus on certification rather than on the teaching-learning process has obviously distorted the purpose of higher education (Ibid.). For instance, centralized examinations make sure that the very best 5 to 7 percent of the students are sorted out from the rest. Consequently, good grades serve as the main indicator for employers to choose the best out of the immense number of graduates. Thus, the crème de la crème of students is eager to study hard and even willing to spend heaps of money for private lessons, if lecturers are not able to sufficiently communicate the content of the curriculum. As a result, the constant outflow of excellent graduates unfortunately is in accordance with the low efficiency of teaching in higher education institutes. The dark side of this consistency is that the great majority of students are being rejected by the market (Panagariya, 2008, pp.443–444). Accordingly, Nilekani (2010, p.322) stated:

“[…] we see a process of selection where more and more aspirants compete for a handful of seats at our best colleges, and for that shrinking chance of grabbing a place in the small patch of light and promise that these institutes offer.”

As a degree has nearly no value for the bottom half of the graduates (Panagariya, 2008, pp.443–444), they have to be content with blue collar jobs unworthy of higher education (Indiresan, 2009, p.175).


Excerpt out of 29 pages


Higher & Vocational Education in India
Friedrich-Alexander University Erlangen-Nuremberg  (Fachbereich Wirtschaftswissenschaften, Lehrstuhl für Auslandswissenschaft)
Advanced Industrial Countries and Emerging Markets - Englischsprachige Kulturen
Catalog Number
ISBN (eBook)
File size
754 KB
Labor Market, Indo-German Cooperation, Student Loans, Reservations, Indian Universities, Tertiary Education, Higher Education, Vocational Education System, Private Education
Quote paper
Bachelor of Arts Petra Eichhorn (Author), 2011, Higher & Vocational Education in India, Munich, GRIN Verlag, https://www.grin.com/document/199495


  • No comments yet.
Read the ebook
Title: Higher & Vocational Education in India

Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free