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

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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