Cabinet approves Rs12,000 crore skill development plan

The skill development ministry will spend between 10% and 15% of the budget for creating a pool of workers for jobs created under programmes such as Make In India, Swachh Bharat and Digital India, said minister Rajiv Pratap Rudy. Photo: PIB

The cabinet on Wednesday approved an outlay of Rs.12,000 crore for providing job skills to and certifying 10 million young people over the next four years, advancing the government’s effort to create an employment-ready workforce for industry.

The central government will be responsible for meeting three-fourths of the target under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and state governments for the remainder. The centre will allocate 25% of the approved expenditure to the states.

Skill development minister Rajiv Pratap Rudy said the cabinet’s approval of the second phase of PMKVY signalled the government’s focus on improving the efficiency and productivity of young Indians.

“This is a big step for us towards empowering the youth of our country and we are certain to strengthen the system and make training more effective with robust monitoring,” Rudy said.

The government of Prime Minister Narendra Modi is trying to expand the available pool of employment-ready Indians to meet the requirements of industry, which has often complained that potential recruits do not possess job skills.

Last week, the cabinet approved a national apprenticeship promotion scheme under which five million people are to be trained by 2019-20 at a cost of Rs.10,000 crore.

Under PMKVY, six million people will be trained for handling specific jobs and four million certified as possessing vocational skills required for employment in industries, under the recognition of prior learning programme.

Private partners will implement the second phase of PMKVY under the oversight of the skill development ministry.

Both the government and industry say it is important to ensure the availability of a sufficient talent pool to take up the jobs that will be created as economic growth accelerates.

“Jobs are not getting created enough because of regulatory cholesterol, but with the change happening both at the centre and state levels, like ease of doing business, it will happen in the next couple of years. The point is we need to fix the supply side keeping in mind the demand,” said Manish Sabharwal, chairman and co-founder of training and staffing company TeamLease Services.

“In the skill development space, employer is the only God. So, we have to fix this skill and efficiency issue before demand side picks up,” he added.

In the last fiscal year, under phase one of PMKVY, the central government trained some 1.97 million people against a target of 2.4 million. But only 1.27 million of these have been certified, meaning the assessment aspect of the scheme needs to be strengthened.

Keeping that in mind, the government has now introduced a quarterly review of the scheme’s outcomes. The government will now pay training providers and assessment firms directly instead of handing over money to trainees.

The new version of the scheme will also include training people to work overseas, including Europe and central Asia.

People from the Northeast and Jammu and Kashmir and districts affected by Maoist violence will be encouraged to enlist for residential training.

The ministry will spend between 10% and 15% of the budget for creating a pool of workers for jobs created under programmes such as Make In India, Swachh Bharat and Digital India, said Rudy.

The programme will focus on improving accountability.

“A third-party agency would be appointed to monitor the validation of all training centers. Detailed guidelines would be framed for the sector skill councils, training partners, franchises and the assessment agencies with respect to revenue sharing, split of the fee between them and other desired parameters”, according to the guidelines for the programme.

In another decision on Wednesday, the cabinet allowed state-owned Indian Oil Corp. to join NTPC Ltd and Coal India Ltd in reviving Fertilizer Corp. of India Ltd.’s sick units in Sindri (Jharkhand) and Gorakhpur (Uttar Pradesh) and Hindustan Fertilizer Corp. Ltd.’s ailing unit at Barauni in Bihar.

Reviving these units is likely to meet the growing demand for urea in Bihar, West Bengal and Jharkhand, the government said.

Separately, the cabinet approved the transfer of government shares in ITI Ltd to a Special National Investment Fund (SNIF) to meet the capital market regulator’s requirement of a minimum 10% public holding in all state-run enterprises.

Government shares are being transferred to SNIF as a sale of shares in the ailing company is not feasible. The Fund will sell these shares eventually, with the proceeds being utilized for social sector schemes.

From 2017, the public holding requirement for state-owned companies will go up to 25%, on par with privately owned companies.

The statement issued after the cabinet meeting said ITI will be allowed to meet the 25% public shareholding norm by August 2017. The company, which had accumulated losses of Rs.5,166 crore as of 31 March 2015, is implementing a turnaround scheme now.