States should join Centre to boost employability

If we keep aside comments like whether the Union Budget 2024-25 is Jilebi-Pakoda budget and everything for allies etc, it has one welcome initiative and that is to nudge companies to take up internship programmes which can contribute to the overall employment and skill development of the nation.

This initiative apart from making the youth well-equipped for a brighter challenge of the global economy can encourage the companies to channelise their corporate social responsibility (CSR) funds for the learning and development of interns and can help address the issue of creating need-based skilled human resources which we are now lacking. The finance minister in her proposals said that the government would allocate Rs 54,000 per annum towards monthly allowance plus a Rs 6,000 grant for incidentals. The companies will have to pay Rs 6,000 from their CSR funds every month towards training costs.

Nirmala Sitharaman said applications will take place through an online portal, and companies’ participation is voluntary. Companies can shortlist candidates based on objective criteria, with emphasis on those with lower employability. The government which had taken up skill development as one of the major components of the budget this year has decided to allocate Rs 1.48 lakh crore towards education, employment and skilling.

At least on such issues, the state governments should rise above party lines and upgrade Industrial Training Institutes (ITIs) and introduce necessary courses. This also calls for bringing in reforms in the education sector right from school level so that it can ultimately align with the skill development schemes and emerging needs.

The Centre has fixed a target of training 20 lakh youth in five years. This can become a reality only when the state governments keep aside petty politics and focus on skill development. The scheme can become successful only when the states and the centre collaborate with each other. The government also proposes education and skilling loans up to Rs7.5 lakh, with a guarantee from a government-promoted fund. For higher education in domestic institutes, students can receive financial support for loans up to Rs 10 lakh. One lakh students will receive direct e-vouchers for this, with annual interest subvention of 3 per cent of the loan amount. If the centre succeeds in implementing this, it can help in increasing the enrolment ratio.

Interestingly, Flipkart is said to be working with various educational institutes in Medchal in Telangana, Malur in Karnataka, Dankuni (West Bengal), Binola (Haryana) and Bhiwandi in Maharashtra. They want to train students in supply chain management. Hiring freshers will help the industry reduce their costs to employers. It will also address the issue of market failure of financing skill development during the last 75 years.

Some fear that after getting trained some may migrate to other companies. But if the companies evolve proper policies and create good eco system, the attrition rate will be low. Every scheme will have its own plus and minus issues. One should not hesitate to experiment with this model skill development just because there would be some minor issues like possibility of some percentage of attrition. Certainly, it is something which should be given a fair trial.