India’s Engineering Crisis Is Hurting Its Manufacturing Ambitions | How India's Economy Works

[00:00:01][Music] You're listening to How India's Economy Works hosted by journalist and author Pooja Mehra [Music] Mr. Gera welcome to the show thank you for coming thank you Pooja thank you you know usually I speak with economists and researchers on the show but we tend to discuss a lot about manufacturing and I thought it would be a good idea to bring you on the show since you have first hand experience of running electrical equipment manufacturing business and you and I have been discussing critical pain points for MSMEs. But before I come to that specific point that I want to talk to you on today's show. I would like to say something about yourself and your manufacturing firm? What do you do, how big is your firm and things like that.

[00:00:52]So that listeners have an idea about where you are coming from?

[00:00:56]What Actually My Journey Had Been? I have been working for few multinational start of my career then we get into the business that is in the year somewhere in 2013 and then from last 10 years we are in this business of manufacturing gensets so otherwise if you really say my experience in manufacturing industry is really more than three decades at various levels at my own venture and is a partnership venture which we started few years back is around 10 years old right.

[00:01:28]So coming to the specific question that I want you to address in today's show which is what you call India's engineers employability crisis.

[00:01:36]Your first-hand experience stems from manufacturing. But this is also a systemic bottle neck affecting mechanical, civil and electrical sectors. Besides your first hand experience. What is unique is you also have the big picture view of this crisis. Because you have been invited by engineering colleges, apex regulatory bodies, etc. Where they seek your opinion and advice on how to bridge this massive gap between what campuses teach and what the actual site work and shop flows demand. So I really like you to help listeners understand the true nature of the skills gap, the size and the nature of the deep divide between the theoretical engineering curriculum and the hands-on application that they need on the shop floor.

[00:02:24]C Pooja, when we are going deep into this subject, first let me define employability. There is a difference between employable and employability. So, employability is having the skills, knowledge, and mindset to get a job, maintain that job, and grow in your career. So, that is employability. Employment is that you are just eligible.

[00:02:49]You are just eligible for that job. So, that is not employability. So, when I am saying it is a crisis, employability crisis, then it is that India is today producing more than 15 lakh engineers annually from near 6500 engineering colleges, but 15 to 20% actually Are employable.

[00:03:14]So it means that doesn't mean balance 80% are non-employable. They are deemed employable.

[00:03:21]What is the meaning of deemed employable is the potential employee in those but they are not ready for the industry skills. What the skills are required. They are not ready for that. So the majority are not yet ready for this in practical terms.

[00:03:38]So there is a shortage of readiness. India does not have a shortage of talent and intellect. We have a shortage of execution readiness. We do not have an execution readiness. I am taking you back into history. Post independent we have something like 60 some I read from net only that there were some 3000 engineering seats only and today it is like 15 lakh engineers are coming out now the major shift which India has seen in near 95 to 2000 when there was 2K crisis has come then India was going into IT segment telecom segment India thought that we should have more engineers but then the government then thought of it that they can not have so many engineering colleges and talent they can attract really so they have gone for privatization of more engineering colleges it was earlier in borough and south then they expanded into all of the India then after this expansion IT and telecom did it fantastic job when we started a journey of 2000 they did a fantastic job and those engineers they served in those segments and all were absorbing them But during that journey one of the M was to support MSMS also for basic engineering electrical mechanical electronics industry also but some how those white collar jobs have actually given a back seat to these domain areas and some how they have started attracting other domains than IT and telecom to the segments I mean electrical mechanical and civil and chemical even they are eligible for getting a job in IT and telecom now when I am using the word crisis so how we reach through this crisis is that IT sector has lot of training budget with them because for them it is a raw material students are raw material for them they have a basic knowledge they train them according to their needs and then use them as per their requirement.

[00:05:52]But when we talk about MSMEs industry they don't have that much margins. IT and telecom have too many margins to train them because that is a raw material. And when I talk about industry which is manufacturing they ca n't afford. So there the radio is not there for domain areas and MSM cannot afford them if they do not have a talent if they do not have skills because they even cannot train they cannot afford the training to them also because they do not have that margin.

[00:06:26]So what finally led to a crisis is that the MSME industry, especially and I will say the manufacturing industry has gone into a vacuum where there is no skill. Now everybody wants to go to it. Everybody wants to go to a segment which is white collar job, more money and more salaries, more you know work life balance there. So those were all the attractions there.

[00:06:51]So mechanical shop, civil construction, electrical substation all these have become a big vacuum where we could not get any right skills. You are essentially saying that because the IT sector has very high profitability margins. They are able to afford the cream of the students that come out of engineering colleges regardless of their specialization and they are able to spend money on training them for their requirement.

[00:07:22]And the remaining students that are there in the market for MSME such as yours to absorb in mechanical and other streams.

[00:07:30]You don't get ready for the job to be done on your shop floor kind of students and you also do not have the profitability margins to retrain them for your purpose is that I say not to retrain even train retrain even for readiness of industry which manufacturing industry is looking for we don't have that much infrastructure to train them that a big infrastructure is required because it is not an IT training city on a laptop something you will do it they are coming from a convention labs and I am having a working shop floor there is a hell of a difference but the difference between IT is a laptop to laptop what is the campus reality like what are colleges fundamentally missing here are students being left behind by outdated curriculum and they are out of sync with what the industry's requirement is on skill development is that what is happening campuses here are what is the bottle neck the problem has now become very complex we are hawking after years when AI has come I think the before AI error still the problem was solvable but now it has become to difficult to solve this problem but I mean we all have to sit together I mean industry has to sit together engineering colleges have to sit together and the government has to sit together to understand where are the gaps and how to fill the gaps now I have extended my discussion on this more crisis in manufacturing today you know puja in India mostly we are assemblers now we are not manufacturers either you take LED TV either you take an air conditioning either you take any product today we are assemblers we take some chips from outside technology from outside some component from outside body we make software we make but we are basically assemblers we are not manufacturers hard core Manufacturers is a Harley 10% in India. Do you agree with me this or not?

[00:09:30]Or Infact It Really Struck Me When You Said The Other Day To Me That We Don't Have A Single Home Grown Manufacturing Brand Of This Nature. We don't even make washing machines in this country. I mean those brands are there. I will not say there are few brands are not there but you know it will be interesting in those brands. Also components are used.

[00:09:51]R imported. We are not manufacturing the components also in those Indian bands. That we are highly dependent on imports and what is the reason for it that we are not our total ecosystem is not prepared for that or I will not say it is only engineering colleges which are responsible for it its total ecosystem mindset of industry mindset of engineering colleges and universities and education system I will say and definitely the government which is taking care. All this ecosystem needs correction and I will appreciate that the government has taken a lot of steps in the last 10 years. I Will Not Say That They Have Not Taken the Steps. See in Japanese they have a reason courses with them.

[00:10:39]What they call it is some of the languages ​​which I was reading that from the age of 15 to 20 years they only train engineers for manufacturing industry. Especially when you look at manufacturing from the lens of employment which is what India needs to do or you can do something in chip manufacturing you can do something for mechanical point of view they only deal with the courses in pure going sending the students for manufacturing industry and they take the feedback from manufacturing industry and then they do those courses there and everything they have a very very less bookish syllabus in that curriculum for that. So that is what they call the Japanese Kosan secret. So they will only train for them. Now parallelly when I see in India there is Skill Ministry has come out, Skill University has come out. I will not say that India has not taken steps. I appreciate those steps are there.

[00:11:35]But now again my query is that how to build that ecosystem between skill university, students and then again what industry is looking for. So this is now the biggest in skill university in India you know puja is stigma social stigma I am working for a blue collar job I have to work with my own hands that keeps this course as a second level of course not first level of course if you don't get a right B.Tech college and you are then again gone into this university that is skill university that is something which I have found that nobody is preferring as a first level of course. Earn Your Spot Earn Your Spot Which is that probably greater number of job openings are there in this segment but they don't become first choice of students because we tend to not regard the word skills as much as we should. Yes our social setup is like that. Second is Government Jobs. They are not eligible for the government jobs. If B.Tech from vocational courses there he may not be fit for and eligible for any government job and in India it is a culture you should have a degree which is suitable for a government positioning best of my knowledge I may be wrong but this is what I have read and I understood then there is a massive awareness gaps between industry actual needs and potential students students are getting to the university they are training also them but actually what DG industry is required and what electrical industry required and what car industry required nobody has come to us that what are your challenges as a skill we are from so and so university no nobody has come to me. So there are teaching with some gap studied by some committee. I didn't think anyone would have studied that.

[00:13:35]Some must have studied, some must have studied but really there is a gap. Even they have not come for employment to us Even I have said if they are teaching something on DGSAT industry and electrical industry nobody has approached me that I have so many students train for you and I can give you those students please come to my campus nothing it is one way so skill is happening somewhere else training is happening somewhere else and I don't know who is consuming them there is a role for policy in repairing this and you interact so much with policy makers and you are asking that the way medical colleges and hospitals do this that same module should be applied to engineering this is a concept of linking schools that you are being talking to me about and I really like to help our listeners understand that because that is a solution possible solution correct see Pooja I divided into this statement of yours in two parts one is that Responsibility of Secretary Boards and Secretary Government which has to actually regulate these things. That is a broader way like skill university government has come put a lot of initiatives on that but let's now because that initiative has been taken by the government. I will not comment on that much but what the colleges can do initially and what universities can do initially. I can put some light on that and it is a workable solution. It will benefit three verticals.

[00:15:03]One is academia. Second is the linking industry. That third is the students. So the all will be in the win-win situation academia as well as industry as well as the students. So university, industry and students all will be in a win-win situation. So what I am thinking is that there is no medical college without an hospital.

[00:15:26]And how come in engineering colleges? Here the really output has to go to the industry does not have that. There is no linkage today? There is a linkage in the name of some you know trainings and some in the name of six months placement training some training are there but are they really justifying the way we require them as industry but we require by it is a big law it is just a curriculum part they do six months even in some to room industry and to room service segment and to room some IT segment they go there and then they just have a trading just to complete the curriculum. So actually we are not on the right path. Now the big problem is this today all universities on academia are focusing on IT. Now this era is also going to be over in the way the AI ​​has come. Having said this they are just focusing on it. The manufacturing industry as such has not been taken care of. So 80%, 90% of their recruitment is happening in IT and they are happening. I have never seen any institution giving awareness and advertising that we are doing something on manufacturing. They are all advertising on IT and IT and IT. So we need to have one linkage between academia and industry. So that's to address the manufacturing challenge. So what will be the mission of this school? What I am thinking is this school to be developed with in the university and a college and this school will have three stakeholders one is itself is a college second is local industry I will not say if I am talking about Punjab let us say we have a Punjab industry let us not expand to you know Haryana and other states and if you are talking about Maharashtra let us talk about Maharashtra because their industry will be localized different here the industry will be localized different that industry stakeholders will map with the engineering colleges what the skills they require and let some credits some credits of those courses should be given to the students for passing that degree.

[00:17:44]So those will be trains and they can they are ready to choose. If suppose some mechanical engineering wants to go to designing a car. Ok? So those skills can be developed for designing a car. So somebody wants to go in to a textile. So he can be trained for a domain knowledge of six months as a textile industry. Somebody Wants to Work for the Electrical Industry. So there can be I will not say this is an easy task. It's a difficult task. Somebody has to map it.

[00:18:11]Then third is that students are trending for that. Now it is ensured after mapping that students are trending for that. Now how will students be trending for that? That will again be the responsibility of the stakeholders. That is industry as well as the students. I will not leave the students alone. Students are not part of it.

[00:18:30]Students as well as the linking school that is the stakeholders of industry. So this linking school will have a process in these campus.

[00:18:41]So first is as industry vetted content.

[00:18:45]Training models are developed with the corporate partners to meet real-world needs and current best practices. Then the problem is that from where to get experts now experts can be even a diploma holders they can also come and train that is not that only we will require a hi-tech PhDs for getting those industrial training they are also welcome to train but our problem is that we only invite those people which we know so engineering colleges and universities have this a gap that they only know the IT people in manufacturing there is a gap they don't know the manufacturing people I am sorry but I am giving that statement.

[00:19:26]So when it comes to resource planning they also be selected by the linking school from the industry ensuring current, applicable and credible instructions.

[00:19:37]So these practitioners when we call they can give the right skills to them. Now selection will be done by the linking school. Having said this every student wants that if I have taken a training some certification has to be given so that particular industry can give a certification also to them so this is one of the portfolio now I am transferring it to how to get two skills for which trainings are required to get that skills. So first is leadership at personality level and then it is on business communication, emotional intelligence and competence building. The second part is process and operation management that is supply chain, project management and lean management. Then Quality Management then IT Management and AI Applications then IT Infrastructure Application Security and Governance then is the core engineering which I have set to you in the way Industry Specific Technical Programs you one student can select one program out of it we want to select from Manufacturing Industry Electrical Industry Mechanical Industry Civil any industry which is available with the linking school so those linking schools can support him with that.

[00:20:56]But this program has to be given by the Linking School. All practitioners will be from the industry. Nobody will be from engineering institution. Sorry. It has to be from practicing engineers will give them a training.

[00:21:11]I want you to explain this a little more.

[00:21:13]When you say that it is alright if they are just diploma holders but they have to be practitioners and not just PhD holders from college faculties. I want you to say a little more about this. Why is it decent and how will this help?

[00:21:25]Even if today any IAS is selected and any civil servants SUPs is selecting them you know training is happening to the lowest level. Am I correct?

[00:21:33]Yes any civil servant has to start from the basic level from where they have to start.

[00:21:39]So even if an engineer has to start his career. Even they have to start from just standing on the machine and seeing how it is repaired. Then who will tell that how it is repaired. Only a technician can tell them how to get prepared he may be having academic knowledge but our problem is that we are calling in engineering colleges big shots telling some big things now for an electrical engineer and a mechanical engineer if he doesn't know how to set up a right a three phase system and electrical engineer only a three phase system and single phase system so then how come their academic knowledge is really required by us our challenge is this only I am saying they may be having better academic knowledge good engineering colleges have better academic knowledge undoubtedly okay but now to how to bridge it with what is happening on the ground even I have four to five years of start up my career as an electrical engineer have worked with my own hands which is actually helping me till today if I would have not worked out than two five years I would not even be communicating with them I am communicating even today with you. Date is what my basic skills of five years how help even I have learnt from ITI people why even diploma holders some electrician told me how to do connections now how better the connection can be done is my outlook with the academics that is fine but what he is doing even I am not aware of it how to do it now the right way I may know it in a better way as an engineer so that is the gap have you understood yes but who bails the cat you sit down with policy makers and regulators and curriculum builders what you say to them about your linking school model and how do they how do they respond again I am saying the linking model linking school model now is not only for manufacturing industry it can be for IT but again I have said all these things in my earlier communication with you IT is doing its job because they are training the freshers at There own cost the problem is more on domain knowledge you know so if I am talking about domain is electrical, mechanical, civil and production engineering. So we have to develop a linking school concept which may come under scale university if it can come the government can also intervene the policy makers can also intervene in that and let that interact with the industry let them interact with the institution and the students. Because students also have to make aware that it is not the only world manufacturing is a big world.

[00:24:14]Only you should have the right skills they will pay you at a par baby then more than even IT more stability than IT because IT is changing continuously now from coding to AI we don't know what will happen after this so manufacturing is going to be stable in coming time and manufacturing is going to be a big boom in a coming time I was saying somebody drones than battery storage systems you know they are going to be a big way than data centers the three business verticals are booming but we are no where neither in data centers we are no where neither in drones manufacturing neither we are in storage systems so all opportunities exist but we have to prepare ourselves so now what discussion is going on that exactly you said who will make the hospital that is linking school who will making linking school in the college Now that is a big question because industry will say what I have to do how can I make it who will fund it and all those things here I think the policy makers will come where really I would like to help you also that is how it can happen because some hospital we have to open in the campus itself so that students can come and get trained there and industry also has to support that linking school local industry has to support that linking skills now now the problem is that how to sync the three people together the three teams together one is engineering colleges then local industry and third is the students this is something is my dream model that it should come true but how it will happen can you help me in this what I can do is I can send our conversation to policy makers that can be my contribution but what you are saying is so important Mr Gera because manufacturing we can Note Give up on manufacturing We for years talk about it and it is very important now to get it right because the geopolitics is true that we cannot have too much dependence on imports and the employability question is true that for employment we do need to rebuild or in fact build our manufacturing sector Now is the time to do it and like you said that you know there is a future here and the time is right perhaps because it is not as attractive as it used to be so this is the time probably to give a renewed push to manufacturing You know from IITs director somewhere I was reading they have said that now the students which we are getting in the IITs are not of the right intellect which we are looking for because they are more on MCQs. You know you must have red on this. They are on MCQs. They are not coming in the way they wanted. And they are also worried that they are may be having a very good marks in JEE Advanced and they are coming to IITs but they are not having the stuff which actually the industry is looking for so this is something is a big question we will have to look for a local big ecosystem right from schools to our higher level of education I guess engineering and medicine medicine is also going to change in a way same way with AI I don't know how they are coping up and they will cope up I don't know so all this thing has to be seen now same linking school I will say is required in the schools also why it is only on engineering colleges again the school students have to become CS they have to become doctors they have to become engineers is there any sinking between then what is happening in industry and what is happened in schools today also because we Can't develop any skill at a final year of B.Tech you know I think industry can do this initiative 3/4/5 industrialist I think at a local level we can get collected give this curriculum to them that we need this somebody will do it may be I can do it like for example same people like me also can add on and they can also give their time and everything but now my challenge is that having said all these things will the institution become excited about this opportunity is there any norm for them for them it will not be a norm because it is a big journey for them them that first we will train them for manufacturing may be manufacturing company will come once or twice or thrice they may not come then students will think that it is better to go to IT to get 20000 salary and 30,000 Salary rather than going to manufacturing where the salaries are not at par with IT but somehow some day we have to take the baby steps this is what exactly I have to say so this linking school can have an inside projects also even FTP I think this this linking school will arrange the FDPs also faculty development programs for the engineering college students I think all engineering colleges must be measured by the skills more rather than it is being measured by the PhDs what they do in into area and what labs they have what skill actually they are developing into the students should be the criteria and evaluating them which still have you know the latter which come to a place from various engineering colleges today is area is this so many PhD doctorates are this then so many papers are published and then they right that their students should be highly placed In IT segment now Pooja tell me how they are helpful to me you are talking about the invitations from colleges to you to go for their placement is it or so when they come for a placement and training request the letter is uniform for all jobs for all segment of industries it is safe it is written as area it is written as PhD it is written as how many papers are internationally published and how the students are getting the placement and last is the highest package average package.

[00:30:21]This will not help me just right that for electrical we are teaching and making the skills the three four five skills we are having my students will have those three four skills it is enough for me I don't need this I will just take my phone and and call please send the students.

[00:30:40]You're saying these shows how they are completely out of tune with what you require. Or.

[00:30:45]So they are thinking that if they will write big area and do PhD and this thing they are also not wrong because they are being mentored by some septuagenarian requirement to fulfill those things already you know government has taken some steps on that but they are not mandatory why not engineering college faculty either government and private can be 20% and 30% from the industry they can come and teach and go let them pay good salaries. No issue. I think the industry would love to do that. Many industries would love to do that to send their engineers. They can earn more. They can give them an industrial leave to teach. The government has floated those policies. That is Professor of Excellence. So they have gone for those schemes that are trending in their own skill set. They can come to engineering colleges and teach. And you know how it happens? It is not an advertisement. It is just said that you see there is some advertisement or it may be also I may be wrong but it is not in the way it is awareness to the industry that yes we have those schemes I have not got any letter from any engineering colleges that if anybody interested for such type of adjacent job they can come join us and we can interact with each other no it may have come a newspaper on internet and some college that is ok I think this position is up purely by references and who is need of that I am sorry this job is not meant for who needs them no this is meant for those who are skilled for that job so we have to attract that faculty into our institute we don't have this measurement in our accreditation of the institute have you seen any time the accreditation of institute no it hardly some segment is there for industry Interaction this world is industry interaction it is not interaction now we have to come into action now it is happening from decades together industry academia interaction now it is a time for action I mean so interaction is happening continuously they are happening but now what is the result it is coming out I have attended so many conferences so many get togethers but at the end of the day we all give the suggestions and then there is no closure for that today if you have to get a B.Tech engineer who has to really know the electrical and mechanical job is not available similarly mechanical is civil and any of this situation is this is being run by technicians I will not say that this condition is there not for large and medium scale industry large and medium scale industries still get survived because they pay more their mechanism of training them is more they are getting induction of the Students system is different but much better than small scale industry but small scale industries which is a you know 30% of our GDP today how we can forget that and then the way the possibilities are coming even a big manufacturing hub also so there also we need manufacturing engineers and now puja is different because in after AI IT will have different shape in coming time I don't want to comment much about IT because I am not an IT person sir but definitely the manufacturing now needs a push in the way we are going into the digital economy.

[00:34:20]I agree with you fully. Thank you. Thank you so much for this conversation.

[00:34:24]Thank you Pooja. Thanks for your time on this subject which will be helpful for all of us. Thank you.

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