Budget FY24 makes some attempts to boost the productive capacity of the economy in the long run, through many key announcements in the skilling, education, and health space. Finance minister Nirmala Sitharaman announced the National Apprenticeship Promotion Scheme to provide stipend support to 4.7 million youth in three years, through direct transfer of benefits. That target itself a significant scaling up of ambition on the apprenticeship front, given government data shows a mere 2.17 million enrolments between FY17 and FY23 (till December 31, 2022)—the enrolment in FY23 (till end-December) stood at 603,000. “The aim to support 4.7 million youth is a bold aspiration and cohesive efforts are required to meet this goal,” says Rituparna Chakraborty, co-founder and executive director, TeamLease Services.
India Inc is now more keen on enrolling apprentices—a study last year by TeamLease Degree Apprenticeship showed an increase of 13% in the net apprenticeship outlook, which is a measure of the intent to engage apprentices, from H1 2022 (January-June) in H2 (July-December). Whether the programme is able to attract enough youth to keep up with the demand from industry, will depend on how exactly this stipend is designed.
The government’s skilling vision is not just limited to gearing youth for industrial employment in the current paradigm but also envisions creating a workforce trained in skills of the future. The finance minister said in her Budget speech that the Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched within the next three years, covering courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, among others. India’s development as a skilling hub will be done with the domestic and international job market in mind, and, to that end, 30 Skill India International Centres will be set up in different states. The infrastructure will be readied for the digital age, too, with the Skill India Digital Platform.
The Budget had many key announcements that could boost human capital in the coming years—the PM Vishwakarma Kaushal Samman for digital, green-tech, branding, and other such skilling of artisans, an Aspirational Blocks Programme targetting saturation of government programmes on health, education, nutrition, financial inclusion, and skill development, in 500 blocks, and even a push to pharma innovation by opening up top-level public-sector medical research to private sector R&D teams.
However, a meaningful push to productive capacity would have needed an expansion of the allocations to the education and health ministries—however, the needle on allocation as a percentage of the GDP has barely moved here from the RE FY23. The Centre’s budgeted education spend remains unchanged from last year, at 0.4% of the GDP. Total government (the Centre plus states) expenditure on education, at 2.9% of the GDP against the NEP goal of 6% public investment in education, shows that the Centre and the states need to increase their shares a fair bit.