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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