Skills Ministry to Use Gati Shakti Data to Chart Training

Government’s GatiShakti Integration for Skills Development: A Digital Leap

Source and Citation: Originally reported by ET Bureau, Jan 01, 2024

Layman’s Explanation

The article highlights the integration of the GatiShakti national master plan portal into India’s skills development ministry programs. GatiShakti provides digital information about existing and planned infrastructure projects across various sectors. The skills ministry is using this data to strategically expand training centers and courses.

By mapping skill centers around key infrastructure projects, the ministry can identify areas with employment potential and skill gaps. This enables the establishment of new training centers and the enhancement of courses to align with emerging job roles. The integration with GatiShakti facilitates evidence-based planning for skill development.

The skills ministry runs programs like Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and aims to improve their effectiveness by leveraging digital governance infrastructure.

Impact on Retail Investors

Opportunities

1. Digital Adoption: Greater coordination and data-driven decision-making signal digital adoption and efficiency gains in governance.
2. Investment in E-Learning: Companies in vernacular e-learning, online skills assessment portals, and AR/VR-based industrial training tools may benefit from rising government priorities in e-learning programs like PMKVY.
3. Vocational Training Providers: Companies like IL&FS Education, TeamLease Skill University, and Jetking Infotrain could potentially gain as skill development becomes a priority.

Risks

1. Limited Directly Listed Stocks: Currently, directly listed stocks with material exposure seem limited in this specific area.
2. Policy Easing Needed: Private sector participation may require policy easing for substantial benefits.

Impact on Industries

Benefits

1. Construction and Logistics Industry: Sectors with skills shortages hindering growth, such as construction and logistics, can benefit from better availability of courses.
2. Sunrise Industries: Emerging industries like EVs, drone tech, IoT, and machine learning can have specialized training options expanded in regions with growing infrastructure.

Challenges

1. Private Sector Inclusion: Further inclusion of the private sector as key knowledge partners is needed.
2. Course Content Digitization: Focus on digitizing course content and online delivery is required to leverage India’s deep mobile penetration.

Long-Term Benefits & Negatives

Benefits

1. Structural Improvements: Evidence-based planning allows India to bridge employer-skill mismatches and raise productivity, employability, and incomes.
2. Project Completion Timelines: Addressing skilled labor shortages proactively can prevent project delays and enhance the completion of strategic national projects.

Risks

1. Policy Stability: Sustained funding allocation and continuous upgrades are vital to prevent initiative fatigue.
2. Technological Upgrades: Continuous upgrades avoiding dated technologies are crucial for long-term success.

Short-Term Benefits & Negatives

Prospects

1. Digital Governance Architecture: Positive signals of structural changes in addressing issues holistically through digital governance architecture.
2. Responsive Skill Development Ecosystem: Building a responsive skill development ecosystem for the coming decade.

Risks

1. Execution Challenges: Evolutionary challenges in execution across complex legacy programs may impact immediate visibility of skill development impact.
2. Budget Allocations: Risks around adequate budget allocations amid fiscal constraints.

In summary, the integration of GatiShakti into skills development planning indicates positive changes in governance. While the immediate impact may take time to be visible on the ground, the move signals constructive progress in governance capabilities, with the potential to address skill gaps and build a more responsive skill development ecosystem. Investors should monitor the execution of these initiatives for tangible outcomes over time.

Potential Gainers & Losers from Gati Shakti Data Integration with Skill Training

Indian Companies:

Gainers:

• Vocational Training Providers: Companies like Adecco India (ADECCO), Apollo Medskills Ltd (APOLOMED), and NIIT Ltd (NIIT) could benefit from increased demand for skill training programs aligned with infrastructure projects identified by Gati Shakti. Improved placement rates and enrollment numbers could positively impact their market sentiment.
• Construction and Infrastructure Companies: Increased focus on skilling for infrastructure projects could benefit companies like Larsen & Toubro Ltd (L&T), Tata Projects Ltd (TATA PROJECTS), and ACC Ltd (ACC). Strong alignment with skilled workforce availability could improve project efficiency and potentially attract larger contracts.
• Logistics and Supply Chain Management Companies: Better logistics and supply chain management skills in line with Gati Shakti projects could benefit companies like Delhivery Ltd (DELHIIVERY) and Blue Dart Express Ltd (BLUEDART). Improved operational efficiency and potential project collaborations could positively impact their sentiment.
• Technology and Software Companies: Increased demand for digital skilling and data analysis related to Gati Shakti projects could benefit IT companies like Infosys Ltd (INFY) and Tata Consultancy Services Ltd (TCS). Development of training programs and data management solutions could lead to new revenue streams.
• Education Technology Companies: Edtech companies like Byju’s (BYJUS) and Unacademy (UNACADEMY) could see increased demand for online skill training programs linked to Gati Shakti projects. Improved accessibility and convenience of training could boost their user base and market share.

Losers:

• Unorganized Skill Training Providers: Increased focus on data-driven and standardized skill training through Gati Shakti could pose challenges for smaller, unorganized training providers lacking accreditation or infrastructure. Difficulty adapting to new standards and competition from larger players could negatively impact their sentiment.
• Companies Reliant on Unskilled Labor: Increased availability of skilled workforce due to Gati Shakti-linked training programs could impact companies primarily reliant on unskilled labor for certain tasks. Automation and potential wage increases could put pressure on their cost structures.
• Companies in Untargeted Sectors: Companies in sectors not directly identified by Gati Shakti projects might see less focus on skilling for their specific needs. Difficulty finding relevant training programs and skilled personnel could hinder their growth and impact their market sentiment.

Global Companies:

Gainers:

• Multinational Infrastructure and Construction Companies: Global companies involved in infrastructure projects in India could benefit from the Gati Shakti-driven focus on skilled workforce availability. Improved project execution and potentially faster completion times could positively impact their sentiment.
• Global Training and Assessment Providers: International companies with expertise in vocational training and skills assessment could collaborate with Indian providers under Gati Shakti. Opportunities for knowledge sharing and technology transfer could benefit their global operations.
• Global Technology and Software Companies: Global tech giants like Microsoft (MSFT) and Google (GOOG) could see increased demand for software solutions and digital tools supporting Gati Shakti data analysis and training programs. Enhanced technology integration could lead to new partnerships and business opportunities.

Losers:

• Global Companies Reliant on Low-skilled Labor in India: If Gati Shakti-linked skilling leads to a general increase in wage rates for skilled labor in India, global companies heavily reliant on low-skilled workforce might face cost pressures. Potential relocation or automation efforts could negatively impact their sentiment.

Market Sentiment:

The news of Gati Shakti data integration with skill training is likely to be met with mixed sentiment. Increased potential for skilled workforce development and infrastructure growth could be viewed positively by investors. However, challenges for some sectors and companies need to be considered. Investors should research specific companies and industries based on their exposure to Gati Shakti-related opportunities and risks before making investment decisions.

Remember, this analysis is based on the provided information and market trends may differ. Conduct further due diligence before making any investment decisions.