Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Thursday, 19 May 2016

Harness " Greed " to " Skill India "

MINT ( 17 May 2016 ) carries a report titled :

" Govt taps profitable PSUs for Skill India Mission "


As per this report , Shri Rajiv Pratap Rudy , Skills Development Minister , has asked all profitable PSUs to take in apprentices equal to 2.5 % of their total workforce


With barely 50-60 PSUs which are " profitable " , this directive is unlikely make a dent , as far as Government target of training 120 million persons by 2020 is concerned


REASON ?

As of now , a total of 28,500 industrial establishments ( Public Sector + Private Sector ) , between them , have 200,000 apprentices . Adding 50/60 " profitable " PSUs cannot make much of a difference !


CONTRAST :

As against our total of 2 lakh apprentices , China has 300 lakh  !


WHAT  NEEDS TO   BE  DONE  ?


 >    JOB  CREATION

      We should , simultaneously amend the Apprentice Act - 1951
      Under the amended Act , every factory will be required to take fresh
      Apprentices in the ratio of 1 : 3 ( one trainee for three permanent
      employees , in each trade ) , instead of current prescribed ratio of 1:7


      This will create a huge demand for ITI trained students



>    COST  REDUCTION

      Since ITI trained apprentices are paid a stipend ( generally 20 % of the
      wages paid to regular / permanent / skilled workers ) , this will sharply
      reduce the manpower costs of manufacturing units


     This will lead to India becoming a " Low Cost Economy " and increase the
     competitiveness of our products , in the international markets , thereby
     boosting our exports ( currently , a meager 1.7 % of World Trade ! )


     This is the major reason why Foxcon ( Taiwan ) wants to put up 10
     factories in India , at an investment of $ 20 billion



>   ADVANTAGE ,  MSME

     Under amended Apprentice Act , permit MSME to retain ITI trained skilled
     workers , on a stipend-basis , for 4 years ( instead of current 2 years )


     This lowering of wages will make MSME very competitive in their cost.


     In turn , this will encourage large organized factories to outsource /
     sub-contract more components to MSME , instead of manufacturing
     in-house


     This will result in a robust " Supply Chain Eco-System "


     It is such an Eco-System in China , which compels Apple to have 331
     Component-Suppliers in China as against ONE supplier from India !



>   PRODUCT  QUALITY

     Product quality depends upon quality of skilled manpower coming out of
     ITIs


     When lakhs of ITIs are competing with one another for attracting
     students , each will try to raise the quality of its training


     When such highly trained students enter work force , quality of  " Make
     in India " products , is bound to rise



>   PERCENTAGE  OF  SKILLED  WORKERS

     Of the total work force , percentage of skilled workers in India today , is
     meager 3.5 % , as against 96 % in South Korea  !


     If my suggestion gets implemented , we should be able to raise this
     figure to at least 50 % in next 10 years !



>   DEMAND   FOR   TEACHERS

     There will be a huge surge in demand for Highly Skilled persons to act as
     teachers / trainers  in 4.4 lakh ITIs  


>   SELF  EMPLOYMENT

     MUDRA bank will provide loans to ITI trained skilled workers to set up
    themselves as local area Carpenters / Electricians / Plumbers / Welders /
    Masons / Repairers etc

    Thousands of ITI trained workers will tend to become Self Employed





Just tell our 50 million MSMEs ( and all larger units, as well ) :


* " Train "  Apprentices ( low cost labour ) , then 

* " Hire " them for longer periods  ( - again , low cost labour ) ,
*  Reduce your manufacturing cost ( to become competitive world-wide ) ,

*  Become more profitable ( and sooner  )



It is time to stop tinkering with persuading of PSUs 

It is time to harness " Greed " to " Skill India "

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www.hemenparekh.in / blogs

19   May   2016

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