New Delhi: The Union government is looking to pump in around Rs1,000 crore in public sector undertakings (PSUs) through the skill development initiative—a move that can lead to creation of 500,000 jobs and help the ruling Bharatiya Janata Party (BJP) earn some political dividend.

The ministry of skill development and entrepreneurship has already held two rounds of discussions with dozens of PSUs aimed at getting them to deploy over 500,000 apprentices instead of just 36,000 now. In return, the ministry shall pay these companies Rs18,000 per apprentice deployed, skill development secretary Rohit Nandan said.

The move will be a win-win situation for both—while the PSUs will get working hands to address staff shortage issues, the BJP-led government can derive political benefit from it through the creation of half a million jobs when job creation is lagging despite government pledges, a second government official said, declining to be named.

The unnamed official said several PSUs are facing a manpower crunch in excess of 12% to 15%. While half-a-million apprentices will mean a total payment of Rs900 crore to PSUs, “once the number gets revised the money flow to PSUs will grow further. The point is through the new apprentices scheme, PSUs can get good working hands at a lower cost to the company," said the official.

Job creation has not picked up in the first two years of the National Democratic Alliance (NDA) government. In 2014, in eight key manufacturing and export-oriented sectors, including IT/BPO, textiles and automobiles, fewer than half-a-million (421,000) jobs were created, and in 2015, the numbers were less than 200,000, according to labour bureau data. However, job portals and staffing agencies are now predicting employment to pick up in the coming quarters. Around 12 million people are entering the labour market every year in India.

Skills secretary Nandan said skill development and apprentices are the best way to create an efficient workforce. “People always talk about private sector while talking about skill development but we believe the public sector can play an equal role. Several of our PSUs are capable of deploying apprentices and thus creating potential jobs," the secretary said.

The secretary said that his ministry has had “successful interactions" with profit making PSUs and that the target of half-a-million apprentices may even be revised upwards, depending on their future interactions with loss-making PSUs.

Asheesh Sharma, director general (training) at the skills ministry said that the ministry is encouraging PSUs to tie up with ITIs or even source apprentices from partners of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). Earlier, only ITIs and technical schools were allowed to send their students for apprenticeships, but now people who have taken short-term skill courses under PMKVY can join factory floors as apprentices. Anindya Mallick, partner at consulting firm Deloitte Touche Tohmatsu India Llp said that PSUs taking more apprentices and the government providing financial assistance is a good move. “It will also create an ecosystem of shop floor trained manpower that will increase quality workers supply in industry clusters," he said.

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