Diversified Portfolio of Skilling Budget

This portfolio of skilling budgets misses nothing. It captures incentives to employers, employees, internship, CSR, manufacturing, training, and skill development. — Alok Singh

The union finance minister presented the budget for the financial year 2024-25 on 23 July 2024. The budget priorities nine domains: Productivity and Resilience in Agriculture, Employment and Skilling, Inclusive Human Resource Development and Social Justice, Manufacturing and Services, Urban Development, Energy Security, Infrastructure, Innovation-Research and Development, and Next Generation Reforms.

The sixty-two-page document of the full budget includes thirty-six pages of annexure to Part A and Part B. Part A is about priorities and theme of the budget and Part B is about direct and indirect taxes. The Annexure to Part A is five pages and all these pages are about employment and skilling. The title of this annexure is also labeled as Prime Minister’s Package for Employment and Skilling. This annexure to Part A reflects the union government’s acceptance of the problem and the commitment to a new solution to the problem. 

The employment has been discussed and accepted as the core problem of the nation. It’s a dichotomy in the prospective employee pursuits for prospective employers and the prospective employers chase for prospective employees. The obvious conclusion is that there is blindness to both. Both are unable to reach each other. If the employment opportunities are seen in isolation, then the solution won’t be visible. The problem is the mismatch between the demand for human resources that is needed and the supply of human resources that is available. If such demand and supply do not match then the solution is to convert the available supply so that it meets the criteria of the demand. The prevailing employment challenge is the outcome of a mismatch between the quality of skilled talent demanded and the quality of skilled talent available. 

We need immediate talent upgradation to meet the challenge. The long wait is not an alternative as we pass through our Amrit Kaal, the transition phase of our demographic dividend. The future generation has an education policy to take care of. But those in the age group of fifteen years to thirty-five years can’t wait for long and their count is more than thirty crores.

The union government realized it decades ago and to meet the immediate demand it came up with the Skill India Program and its variants. To avoid any such future mismatch between demand and supply of human resources, the union government backward integrated the whole training program up to primary schools. And this commitment is echoed in the National Education Policy” (NEP) 2020. NEP rightly figured out multilanguage, regional language, and pedagogy to include vocational, academic, curricular, and extracurricular with equal importance. This is to generate mental, physical, and emotional strength as well as develop team spirit, respect national commitments, and habit of upgrading oneself lifelong. This NEP discards rote learning and degree-producing academic factories. The NEP is a long-term project.  We needed something for short-term necessities which resulted in the Skill India Program. However, the outcomes of the old Skill India Program did not meet the intended output. 

The missed intended output of Skill India forces the union government to revisit the drawing board and rewrite the script for job opportunities. This resulted in well-crafted incentives linked to employment and job creation apart from the support for entrepreneurship and the startup ecosystem. 

The Annexure of Part A of the budget document is exclusively dedicated to job-specific employment. The mindset of employment means the job is a challenging thing to change. The Swavalambi Bharat Abhiyan (SBA) within the management of Swadeshi Jagran Manch has grown enough since its inception in the year 2022. SBA is working to change the narrative that employment means a job. It comprises many partners that work in the domain of social, political, technological, academic, and policy making.

The Annexure of Part A focuses on five points. The first three are different variants of employment-linked incentives.

The first is labeled as Employment Linked Incentive Scheme A: First Timers. The core of this scheme is to bear the cost of the learning curve of the prospective employee. The companies fear that once they train a human resource, they leave their company for a marginally better opportunity and this causes a loss of time, money, and energy to the first-time employer. The union government has addressed this concern of the employers with this scheme. It has been constrained in a way that only the genuine employer and employee can avail the financial support from the government, for example: the employee must retain the employer for twelve months otherwise refund the receiving.

The second is labeled as Employment Linked Incentive Scheme B: Job Creation in Manufacturing. Scheme A is open for all sectors while scheme B has more constraints. Those who are eligible for scheme B can avail of scheme A as well. Scheme B is basically for job offers to new first-time employees with the condition that such number should be at least fifty or twenty-five percent of the previous number of employees who are getting Employees Provident Fund Organization (EPFO) benefits. This scheme is for manufacturing sector corporates, and eligibility for non-corporates is with an additional condition that they should have a track record of contribution towards EPFO in the last three years.

The third scheme is labeled as Employment Linked Incentive Scheme C: Support to Employers. This is basically for those who miss scheme B. Those who are in Scheme A can avail of Scheme C also, and there are special provisions for those who create more than a thousand jobs. This scheme also supports those who create at least two jobs where the total previous year’s job strength is less than fifty and create five jobs where the previous year’s job strength is more than fifty. This scheme specifies that the new employees don’t need to be new to EPFO also, it means that the hired employees need not be first-time job seekers. Those who are availing of scheme B are not eligible for scheme C.

The fourth scheme is called the Skilling Program and Upgradation of Industrial Training Institutes. This scheme aims to benefit twenty lakh youths and upgrade thousands of Industrial Training Institutes with the help of financial support from the central government and other stakeholders. The state government has also to contribute and the industrial contribution is to be considered as Corporate Social Responsibility. 

The fifth scheme is labeled as Internship in Top Companies. This scheme is for those who are not pursuing any full-time education or are not engaged in any job. This scheme does not apply to those candidates who studied at the Indian Institute of Technology, Indian Institute of Management, or IISER and hold professional degrees like Chartered Accountants, CMA, and or any other equivalent. The top companies are expected to train one crore youth aged between twenty-one to twenty-four years and the expenses will be considered as contribution towards CSR.

This portfolio of skilling budgets misses nothing. It captures incentives to employers, employees, internship, CSR, manufacturing, training, and skill development. The focus is on applicable quality rather than theoretical printed certificates of skill or quantity. The demand and supply mismatch of skilled youth has been addressed in this budget. We wish success to all the stakeholders. It’s also necessary to keep in mind that employment does not mean job only. 

(Alok Singh has a doctorate in management from the Indian Institute of Management Indore and promoter of Transition Research Consultancy for Policy and Management.)

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