A dearth of skilled workforce is resulting in high attrition and cost-push inflation - a trend that could hurt the economy, the Economic Survey has warned.
"Besides leading to higher wage cost which contributes to cost push inflation, skill shortage may also lead to eroding of price advantage in some of the tradable sectors of the Indian economy," the Survey said.
The country is facing a shortage of skills in technology, outsourcing sector, semi-skilled labour intensive sectors such as manufacturing, and modern services like organised retail, civil aviation, construction and finance.
The enormous demand for professional education and employable skills cannot be met by the public sector alone and the entry of private and non-government sectors such as recognised universities, education and skill development institutes under a professional, independent and credible regulatory system is essential for meeting the requirement, the Survey noted.
It suggested introduction of liberalised norms for the entry of reputed foreign universities in the country. The Survey also underlined the need for setting up a skill standardisation and certification system for over 6,000 odd skills required by the industry.