Skill development is at the centre of changes happening in education and labour markets amid the global megatrends, such as automation, action against climate change, and the digitalisation of products and services, which are changing the nature of work and skills demands.
With one of the youngest populations, a median age of 28, India can harness its demographic dividend by nurturing a workforce that is equipped with employable skills and prepared for the needs of the industry. Elevated levels and superior standards of skills help countries adeptly navigate the challenges and opportunities present in both domestic and international job markets.
Even though India has a huge human resource at an employable age, the skill gap of this young population remains a major challenge to employability. The fresh graduates from the domestic universities are not equipped with the practical skills necessary for the industry. The economic survey for the year 2023-2024 has duly noted the skill gap in the Indian population. The relevant portion from the survey is extracted below:
5.14. Skill gap challenge: Sixty-five per cent of India’s fast-growing population is under 35, and many lack the skills needed by a modern economy. Estimates show that about 51.25 per cent of the youth is deemed employable. In other words, about one in two are not yet readily employable, straight out of college.
The budget for the year 2024-2025 poses to address this skill gap in the young population with the following schemes and the relevant norms and course of action are expected in due course
1. Skilling Programme and Upgradation of Industrial Training Institutes
This is a centrally sponsored skilling scheme in collaboration with states and industry. As per this scheme, 20 lakh youth will be skilled over the next 5 years. 1,000 Industrial Training Institutes will be upgraded in a hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of the industry, and new courses will be introduced for emerging needs.
Under this scheme, the government has announced a total outlay of INR 60,000 crore over five years, which will be as follows:
- Government of India— INR 30,000 crore
- State Governments— INR 20,000 crore
- Industry— INR 10,000 crore (including CSR funding)
This scheme tries to establish 200 hubs and 800 spoke ITIs –all with industry collaboration, which will work as follows:
- Re-design and review of existing courses
- New courses
- 1 to 2-year courses in all 1000 ITIs
- Short-term specialised courses in Hub
2. Skill loan
Further, the centre has introduced a Model Skill Loan Scheme to facilitate loans up to 7.5 lakh with a guarantee from a government-promoted Fund. This measure is expected to help 25,000 students every year.
3. Internship in Top Companies
As per this scheme one crore youth to be skilled by India’s top companies in five years. Twelve months of Prime Minister’s Internship with a monthly allowance of INR 5,000 is proposed. This scheme applies to those who are not employed and not engaged in full-time education. Youth aged between 21 and 24 will be eligible to apply. Company to select from a short list; shortlisting based on objective criteria with emphasis on those with lower employability. The company is expected to provide the person with an actual working experience in a skill in which the company is directly involved.
The cost-sharing (per annum) for the scheme proposed is illustrated as follows:
- Government – INR 54,000 towards monthly allowance (plus INR 6,000 grant for incidentals)
- Company – INR 6,000 from CSR funds towards monthly allowance
- Training costs to be borne by the Company from CSR funds.
- Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure)
The ineligible candidates (indicative list) as per the scheme is as follows:
- Candidate has IIT, IIM, IISER, CA, CMA etc as qualification
- Any member of the family is assessed to Income Tax
- Any member of the family is a government employee, etc.
These schemes strengthen the perception that the talent pool in India is a global asset. Proper implementation of these schemes will undoubtedly address the skill gap, which will ultimately lead to the reduction of the unemployment rate. It is to be noted that, in the schemes, the government has directed the companies to use their CSR funds for the skilling programme. This is a positive step in the right direction that can help the youth in the country.
The above proposal may be followed with more procedural clarifications by way of legislation or directions by the government or the relevant authorities in due course.
