Monday, 6 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


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