Return to Skills in India: The Role of Digital Access and Usage

This article analyses the quality of labour force in India using the data from India’s Citizen Environment and Consumer Economy (ICE) 360° survey (2016), which provides a view on how Indians earn, spend, save, invest, live, think, access amenities and public goods and consume. The approach adopted here provides an alternative perspective on the quality of labour force, which depends on skill levels, education and technology. The analysis reveals that Indian labour markets depicts a clear dichotomy between higher skill levels being dominated largely by the high-skilled workers and the manual jobs with lower skill levels for the low-skilled workers. Technology and digital usage has further accentuated this earnings differential. Also, higher skill levels in India tend to have both higher average earning and education levels compared to their lower skill counterparts, leading to widening the earning inequality.Further, this analysis provides important insights into the low skill levels of the vast Indian labour force, which would require re-qualification and re-specialisation of the labour force in order to compete in fast-changing globalised India. Thus, it becomes critical for Indian policymakers to relook the skill formation and education system to be able to swiftly and effectively respond to constantly evolving skill demand in the local, national and global market.