Post-Budget, time for action: Going for the skill

The Amrit Kaal is on and we need to show urgency in making every youth employable, lest we run out of time.

Written by Guest

August 5, 2024 03:15 IST

Skilling announcements in the Budget don’t look like statements of intent. The outlays are clear. The target segment is identified. Timelines are defined. Outcomes and ownership are clear. (Image source: Freepik)

By Narayanan Ramaswamy

If there is one issue that has united the nation, it’s the need for equipping our youth for employment (or jobs). While the NEP is a structural reform and will take time to make an impact, we need immediate measures to boost ‘employability’ of our youth. Hence, it’s not surprising that this year’s Budget – presented on July 23 – provided a lot of emphasis on skill development and jobs. The message is unequivocal to the youth: Go for the skill and you’ll get support from all quarters – academia, industry and government.

This, of course, assumes – maybe rightly so – that there are enough employment opportunities. Earlier, there used to be incentives for industries and sectoral growth – with the expectation that jobs will eventually happen. It had mixed success. Now, we can see a perceptible shift in the approach for job creation. This is more direct, incentivising people to offer jobs at one level and preparing themselves for taking up jobs at another level.

Let’s look into the five initiatives – three on incentives for employment, and two for skill development – that have become a talking point in almost all Budget analysis.

Of the three related to employment, two are directly linked to first-time employees. There is a clear signalling to industry that government is willing to fund ‘freshers’ – thereby sharing the ‘risk’ with employers. The third is more broad-based to incentivise for incremental employment above the baseline. All these are linked to EPFO registration and contribution – subtly nudging industry players to take up formal employment.

Now coming to the two schemes for skill development, the upgrade of 1,000 ITIs focuses on reforming the traditional vocational education system. The recent STRIVE (Skills Strengthening for Industrial Value Enhancement) programme by the DGT saw enthusiastic participation from 500 ITIs and encouraging outcomes in terms of efficiency and employability. This scheme co-opts central government, state government and industry as owners, and I’m sure participation by these stakeholders will be higher now.

Lastly, the internship initiative is an innovative scheme, taking a cue from the existing apprenticeship programme for a different target segment – youth who are qualified but unemployed – to cover a whopping 10 million beneficiaries. Here, skilling is done by industry directly, on-the-job, for one year. This gives sufficient time for the youth to learn, apply, assess and feel confident, and gives employers time to evaluate and absorb talent – trained in their own environment. Here also, the industry is co-opted as owner (with 10% contribution from their CSR kitty), though the bulk of the cost (90%) is borne by the government.

Apart from these, the loan schemes for higher education and skill development will help respective institutions to be bold in spending on right areas such as infrastructure – both physical and digital, labs (where relevant), faculty development, collaboration etc – and attract bright students by providing need-blind admissions.

A striking feature of these announcements is the details. It’s not just a statement of intent. The outlays are clear. The target segment is unambiguously identified. Timelines are defined and linked with the incentive. Outcomes and ownership are clear. Of course, there are questions to be answered and doubts that linger – for example, while it is called ‘internship’, it is not clear if current students in higher education institutions will be a part of it, or how the 500 companies will be decided etc.

I think it’s time we start thinking about how to leverage such opportunities. Industry should come up with mechanisms for large-scale internships – using digital technologies – providing exposure and oversight for a larger number of interns. Industry can use this opportunity to build a pipeline for talent – by investing in training before formal hiring. The banking industry tried a variation of this successfully, recently. Other big employment sectors such as manufacturing, healthcare, energy, IT, auto, FMCG etc should adopt this approach of investing in human resources development before formal employment. It would mean a shift in the approach to job profiling (you need to think about the future), hiring, assessment, L&D programmes of these corporations – big and small – and maybe investments in systems to cater to this. It is worthwhile.

In the ITI upgradation – hub-and-spoke model – industry should look at investing and ‘owning’ (not the entity ownership, but curriculum and outcomes) the hub ITIs. Our banks should leverage by participating in loans schemes and expand their portfolio in the fast-growing education and skill development space.