In India, the skill gap in the labour force is a significant challenge.
24 Jul 2024 | 9803 Views | By Radhika Dave
Skilling got its due in the Budget 2024 announced by Finance Minister Nirmala, as she announced a Rs 2 lakh crore central outlay, with particular emphasis on employment, skilling and other opportunities for 4.1 crore youth over a five year period.
"In this Budget, we particularly focus on employment, ...
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Skilling got its due in the Budget 2024 announced by Finance Minister Nirmala, as she announced a Rs 2 lakh crore central outlay, with particular emphasis on employment, skilling and other opportunities for 4.1 crore youth over a five year period.
"In this Budget, we particularly focus on employment, skilling, MSMEs and the middle class," the Finance Minister said while presenting the Union Budget 2024-25 in Parliament on 23 July 2024.
The three schemes were announced under the Employment Linked Incentive. Scheme A was for first time employees with Direct benefit transfers of a one month salary in three installments, up to Rs 15,000.
Scheme B focused on incentives to be provided to employees and employers, as per their EPFO contribution, in the first four years of employment. Aiming at substantial hiring of first time employees in manufacturing, this scheme will incentivise additional employment in the sector, thereby is expected to benefit 30 lakh youth entering employment, and their employers.
Scheme C focused on reimbursement of employers, of up to Rs 3000 per month for two years towards their EPFO contribution for each additional employee.
The fourth Scheme was a centrally sponsored scheme in collaboration with state governments and industry. The scheme, with a total outlay of Rs 60,000 crore, aims at skilling 20 lakh youth over a 5-year period.
Internship opportunities in 500 top companies to 1 crore youth in 5 years was also announced,where an internship allowance of Rs. 5,000 per month, along with a one-time assistance of Rs. 6,000 will be provided. Companies will be expected to bear the training cost and 10% of the internship cost from their CSR funds.
"The government's initiatives for job creation and investment in industrial training centres will ensure a skilled workforce in the automotive sector. While the budget lays a strong foundation for overall economic growth, we look forward to ongoing government’s support and incentives to accelerate green mobility and promote sustainable practices," said Rajeev Chaba, CEO Emeritus, JSW MG Motor India.
Chetan Maini, Co founder and Chairman, Sun Mobility said, Budget 2024 outlines a strong vision for economic development along with job creation. The government’s emphasis on skilling will help bridge the skills gap in the EV technology space."
The Advisor to the NITI Aayog, Sudhendhu J Sinha said recently that, around 50 million EVs are envisioned to be plying globally by 2040, “we barely have a 15-year window to bridge the skill deficit in the area of vehicle electrification.” Therefore if we create these skilling opportunities, it would augur well for the entire industry. This would also ensure employability at the global level. We must also attempt to break the myth that electrification will reduce jobs, especially in the informal sector,” he had noted earlier.
Rajneesh Singhvi, Managing Partner H.S. Darda & Co. said that with the advent of AI, there is an increasing focus on skill development and the need of the hour is to be receptive and adaptive, which the budget has managed to do.
Warren Harris, CEO and MD of Tata Technologies, said, We commend the Indian government's recent budget, which places a significant emphasis on youth skill development and employment opportunities. The proposed initiative to equip 20 lakh young people with relevant skills over the next five years is commendable and timely, representing a strategic vision for the future.
The commitment to upgrading over 1,000 ITIs is a welcome step forward in recognising the importance of vocational training and upskilling to address the skill gap. This budget underscores the critical role of youth upskilling as an economic driver, providing a much-needed boost to India's growing workforce and empowering the government's Make in India initiatives."
In India, the skill gap in the labour force is a significant challenge, with only about 51.25 percent of the youth deemed employable due to a lack of necessary skills, as per an ORF report.
"We welcome the increased emphasis towards education and skilling with the introduction of several transformative measures for students and youths. Complementing this, the introduction of internship scheme with stipend from CSR (corporate social responsibility) spending is encouraging, aimed at providing good exposure to real work environment and heighten job opportunities," said Vikram Gulati - Country Head and Executive Vice President, Corporate Affairs and Governance, Toyota Kirloskar Motor.