Furthering Prime Minister Narendra Modi’s Skill India Mission, finance minister Arun Jaitley announced Rs 1,804 crore for the skill development ministry to push job creation, aside from announcing a pension incentive.
Tasked with creating entrepreneurs and an employable workforce, the Ministry of Skill Development and Entrepreneurship will target training one crore youth over the next three years. As many as 1,500 new multi-skill centres will be set up with funds amounting to Rs 200 crore under the National Skill Development Council through the Ministry’s flagship scheme, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
As an incentive for boosting workforce in the formal sector, Jaitley said the Centre would contribute 8.33% of the employee pension scheme for all new enrolments in Employees Provident Fund Organisation for their first three years. Those with a salary up to Rs 15,000 per month will be applicable for the scheme that has received Rs 1,000 crore.
The scheme is expected to help create a central database of skilled and employed personnel, and get a sense of how far skill training is impacting the largely unorganised private sector. A large chunk of the funds – Rs 1350 crore – has been diverted to the PMKVY.
The ministry was created last year to “capitalise India’s demographic advantage”, and has so far seen a 73 per cent jump in its allocation. However in comparison to China’s 80% skilled workforce, data from the National Sample Survey Organisation shows that India has just about 4% skilled people.
To streamline job placements, Jaitley announced setting up a National Board for Skill Development Certification with a Rs 50 crore cash purse, in partnership with the industry and academia. State employment exchanges will be linked with the National Career Service platform, and 100 model career centres will become operational by the end of 2016-17.
Entrepreneurship, education and training will be provided in 2,200 colleges, 300 schools, 500 government industrial training institutes and 50 vocational training centres through Massive Open Online Courses and aspiring entrepreneurs, particularly those from remote parts of the country, will be connected to mentors and credit markets. Of the funds, Rs 33 crore will be spent on apprenticeship training and Rs 50 crore as seed money for entrepreneurs.
While launching the PMKVY in July 2015, the Prime Minister underlined that India will have a surplus manpower of four to five crore over the next decade, and unless equipped with skills, the demographic dividend would become a challenge in itself.
But though skill training remains high on Modi’s agenda, there has not been a commensurate allocation of funds; in the revised budget for 2015-16, the allocation was Rs 1037 crore.