Budget ’09: Rs31,000 cr mission to develop skills

Budget ’09: Rs31,000 cr mission to develop skills
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First Published: Mon, Feb 04 2008. 12 01 AM IST
Updated: Mon, Feb 04 2008. 12 01 AM IST
To address India’s growing skills shortage, the Union government is setting up a Rs31,000 crore skill development mission, a measure that is likely to be announced in the Union Budget for 2008-09.
Expected to be operational in the next fiscal year, the programme is to extend training facilities to 10 million people a month, up from 2.5 million a year at present.
The mission, accorded top priority by Prime Minister Manmohan Singh, is expected to oversee and facilitate the entire process, which the government will run in collaboration with the private sector.
While the mission will be headed by the Prime Minister, Planning Commission deputy chairman Montek Singh Ahluwalia will be its vice-chairman. Heads of industry associations are expected be part of the mission’s general body.
“Planning Commission has been given directions by the Prime Minister to expedite implementation of the mission and seek immediate cabinet approval, so that the mission could be announced in Budget 2008-09,” said a senior government official who did not want to be identified.
The impetus for the initiative stems from the concern that the 9%-plus growth recorded in the past three years has not witnessed a commensurate jump in employment. At the same time, several sectors, especially in services such as information technology, growth is beginning to be curbed due to lack of skilled personnel.
The mission will be anchored in the Planning Commission, even as it could end up being set up as an autonomous body, a society or a special purpose vehicle.
Besides, 17 Union ministries, which are already associated with skill development projects of some sort, will help implement the programmes.
Mint had earlier reported that a cabinet note on giving concrete shape to the skills development mission was ready on 9 January.
The finance ministry has worked out a tentative allocation of Rs1,700 crore in the coming Budget, also the first year of the mission. The government has projected that 70 million jobs will be created during the 11th Plan (2007-12) and proposes to spend Rs31,000 crore during that period.
The mission will oversee short-term vocational courses ranging from six months to two years, which will be provided by both government and private sector institutions as also certification of such courses. More than 8,000 vocational training institutes run by the government together with those run by the private sector are expected to facilitate the mission and will play the role of sub-missions.
According to the latest National Sample Survey, which is conducted at a micro level through extensive field work, in 2004-05, only 2% of the population in the age group 15-29 was reported to have received formal vocational training. An additional 8% received non-formal vocational training, the report said.
The government has identified 20 growth areas for skill development in manufacturing and services. These include automobile and auto component, transportation, logistics, warehousing and packaging, travel and tourism, media and entertainment and health care services, all of which are perceived as high-growth sectors.
Amir Ullah Khan, economist with the India Development Foundation, a think tank that has done considerable work in this sector, said, “According to estimates made by the Confederation of Indian Industry and McKinsey and Co., currently the shortage in skilled labour is anywhere between five million and 10 million. With the economy growing at 9-10%, this may shoot up to 50 million in five years. And since growth is largely service-sector-driven,?requirement of skilled labour is going to be a serious problem.”
He added that a skill development mission has to focus on employability, since in the past, several graduates from these vocational institutions did not have the desired skills to be employed.
To promote job-oriented education, he also suggests reforms in the All India Council for Technical Education, the body which plans and coordinates technical education.
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First Published: Mon, Feb 04 2008. 12 01 AM IST