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The Union government has urged all ministries and departments to hire only certified skilled workers for contract work, underlining that this will not only drive formality in the labour market but also help cut down government expenditure on skill training.

The skills and entrepreneurship ministry has written to all other ministries and departments suggesting that it be done in the next fiscal and said that if it is not possible to do it in one go, it should be done in a staggered manner with the aim of achieving 100% implementation in five years.

Almost 59% of those trained under PMKVY were placed against a target of 70%, according to official data
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Almost 59% of those trained under PMKVY were placed against a target of 70%, according to official data

If implemented well, the move would not only improve productivity of contract workers but also boost wage premium, the ministry said. It shall also create demand for skill trained person in industries and in the larger labour force, it said in the letter. Mint has seen a copy of the letter, which also urges ministries to direct autonomous institutions under them to follow this path.

A government job being aspirational, even if it is contractual, will eventually attract more people to the skilling ecosystem and encourage them to pay for skill training themselves, the ministry said. Thus, it will help “do away with the present system of government driving skilling through funding" over a period of time.

“As you might be aware, the government has been trying to bring in an elaborate skilling ecosystem, so as to change the labour market structure from a larger unskilled one to a predominantly formerly skilled one. However, as per PLFS (period labour force survey) in 2018-19, only 2.4% of the workforce in the country is formally trained," the ministry said in its letter.

It underscored that this is because of the practice of not using only certified workers, especially contractors, even for government contracts.

“This has led to a situation that while on one hand government is trying to promote skilling in the country, on the other it is not insisting on the use of skilled labour for the contracts it enters into. Perhaps the time has come for mandating the engagement of certified skilled workers by government contractors," skills secretary Praveen Kumar wrote in the letter.

“Given the quantum of manpower engaged in government and government contract works, this would help in making skilling aspirational for our youth and spread the culture of certified skilling and demand for skilling would start coming from industry and the labour force itself, which will prefer to pay for skilling itself, doing away with the present system of government trying to drive skilling through funding," Kumar wrote.

Besides, higher workforce productivity and output quality in government and government contract works, a beneficial impact would be the improvement in wages for this skilled manpower hired, it has written.

If implemented well, then it can also create more jobs for skilled workers and increase the placement percentage of trainees under the flagship skills mission. Almost 59% of those trained under PMKVY were placed against a target of 70%, according to official data.

The ministry has urged ministries and departments to issue instructions to all entities or bodies under its administrative control for engaging certified skilled workers for their work.

The ministry said if the provision cannot be applied immediately, then phase-wise application can be thought of.

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