Emails (Others): Skill Capital of the World ?

Tuesday, 7 June 2016

Skill Capital of the World ?

While announcing major reforms in, " Apprenticeship Training Scheme " ,

Shri Narendra Modi said :

" Let's make India the Skill Capital of the World "

He went on to add :

" By next decade, India will have 50 million surplus manpower for export "

But , we all know that :

# NSDC ( National Skills Development Corporation ) has a target to impart

" Skills " to 300 million youth by 2022 ( approx 50 million / year )

# As of now , only some 27 % of college graduates are " employable "

# 50 % of our current population (approx 550 million) are under age of 27

In light of the foregoing , the reforms ( in Apprentice Scheme ) announced are most welcome , especially in respect of the following :

# Inclusion of " SERVICE " sector

# Inclusion of Graduates / Post Graduates from Arts / Science / Commerce

# Self Assessment by Companies

# Freedom to Companies to introduce own NEW courses

# Freedom to engage apprentices from ANY state

# Doing away with trade-wise ratios

It could have been still better if :

# Offset against CSR ,( of the expense incurred by Companies on

Apprentice Scheme ) was NOT restricted to only those Companies

which engaged apprentices in excess of mandatory 2.5 % of employee

strength

# For 6 trades , training duration was NOT reduced from 3 to 2 years

# Stipend payable was lower than specified 70% / 80 % / 90 % of

Semi-Skilled minimum wages ( of approx Rs 6000 per month )

# Minimum Mandatory limit was raised from 2.5 % to 5 %

# There was NO upper limit for engaging ( currently 10 % of employees )

But , all of these , will still be " tinkering " !

Nothing bold enough to turn India into , " Skill capital of the World "

None of the above-mentioned reforms will enable us to train / skill , 50 million youth , EVERY YEAR !

Now consider the following :

# If current diasporas of 21 million Indians working abroad , remit $ 70

Billion annually , then how much can 50 million surplus manpower

remit to their relatives in India , by 2026 ?

Can current 21 million plus another 50 million ( a total of 71 million ) ,

remit , $ 250 Billion , by 2026 ? Let there be NO doubt !

# Are Government machineries / incentives , enough to train 50 million

youth each year , even under this " Reformed Scheme " ?

# If one training Institute can train ( say ) , 1,000 trainees each year ,

we would need some 50,000 Training Institutes , each with an

investment of Rs 100 Crores ( Land + Building + Plant and Machinery ) ,

entailing , a total investment of Rs 50 lakh*crore !

# Government has neither such funds , nor an administrative machinery to

set up 50,000 training institutes , even in next 5 years !

There is only one way

This can be made to happen , as follows :

* Turn this entire exercise into a PROFIT MAKING proposition in the

hands of PRIVATE SECTOR ( Individuals + Corporate + Start Ups )

* Enable BLACK MONEY to be invested in private sector SPVs called,

" XYZ Manpower Skilling SPV ",

with no questions asked as to the source of funds invested ( domestic

or Foreign )

* Grant INDUSTRY status to such SPVs

* In order to attract PRIVATE Individuals / Corporate, to come forward

and set up these 50,000 SPVs ( before March 2018 ), provide a 10 year

TAX HOLIDAY , to " Manpower Skilling Industry "

Much in the same way NITI Aayog has recommended for companies

investing in Electronics manufacturing activities . And as against

expected creation of 20,000 jobs due to this proposed policy in

Electronic Industry , my suggestion would create 50 LAKH jobs @ 100

jobs / SPV !

Also worth noting that :

NITI Aayog is recommending this tax-holiday policy for only NEW units

being set up , without any estimate as to the amount exchange likely

to be earned through exports from these NEW units

On the other hand , my suggestion has a definitive potential to bring in

remittances worth $ 250 Billion by 2026 !

# Just like various IIMs ( and other reputed Management Training

Colleges ) , permit these SPVs to charge to the Companies conducting

Campus Interviews ,

* Fixed Participation Fees

* Variable Student Support Fees ( per student hired )

# SPVs will be allowed to devise their own courses / curriculum and

conduct their own exams / award their own certificates / diplomas

# SPVs will be free to charge their own fees and compete for placement

of their graduating students , in an atmosphere of open and free

competition ( much as it works today for most educational institutes )

# Government may continue to provide STIPEND SUBSIDY as proposed

in the Reforms , but only to Indian MSMEs

My proposal has the potential to bring back those Rs 35 lakh*crore that Indians have siphoned abroad , between 2003-13

As far as I can see , there is no other way , India can either become the Skill Capital of the World or be in a position to export 50 million surplus Skilled persons

I envisage an alternate scenario under which Europe , in order to overcome its shrinking population and resultant " Skill Shortage ", starts , intensive " Skills Training " of those millions of unskilled migrants from Middle East and Africa , who are flooding the shores of Italy and Greece

That will put to rest , Shri Modiji's dream of exporting surplus skilled manpower !

It is still not too late for some " Out of the Box / Bold " decisions !

A shining example of what a PROFIT MOTIVATED / PRIVATE sector can achieve is Elon Musk ( of TESLA motors ) , who , within a short span of 2 years , has landed a re-usable rocket on a floating platform in sea 4 times - something which NASA could not achieve in 50 years !

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08 June 2016

www.hemenparekh.in / blogs