A couple of days back , PM Shri Narendra Modiji
launched this scheme
Some 20 odd Central Government Ministries / Departments
are engaged in this effort
Many State Governments are joining forces to impart
Skills Training to millions of Indian Youth
As to the number of youth planned to be trained ,
following figures are reported :
> 400
million by 2022
> Creation
of a pool of 500 million skilled youth by 2022
>
Exportable surplus of 40/50 million skilled youths
Major burden for this Herculean effort will be borne by
some 11,500 ITIs ( Industrial Training Institutes ) , with a combined intake
capacity of 1.6 million students per year ( most have 2 / 3 year courses )
An intake of barely 140 students per ITI per year !
But Skill India program is talking of imparting skills
to some 60 million youth every year , for the next 7 years !
That would require some 4,40,000 ITIs , altogether !
Now , assuming that setting up a full-fledged ITI ,
would require an investment of Rs 1 Crore , we are talking of a fund of Rs 4.4
lakh*crores !
Governments ( Central + States ) don't have that kind
of money
Nor will banks lend that kind of money to anyone to set
up an ITI , without assurance of adequate returns ! Banks are already bleeding
with NPAs amounting to Rs 4 lakh*crores and begging the Central Government for
re-capitalization !
There are two sources from where this kind of money can
come from
These are :
> 100 % FDI
in ITIs
> Black
Money Channelizing in ITIs
To encourage Black Money to flow into this most
productive and beneficial use , we must come out with an Amnesty Scheme for
such investments thru
SPVs.
And , whether the investment came through 100 % FDI or
thru Amnesty Scheme , the income from operating an ITI , should be made
tax-free for 20 years
Nothing short of an " Out of Box " thinking
will help !
If this suggestion is implemented , I see following
consequences :
> FDI
INFLOW IN SERVICE SECTOR
There will
be a huge inflow of FDI from Foreign Investors , who , today
earn 2 %
from their bank deposits . Their investment in an Indian ITI ,
can earn
them , may be , 10 % - and tax-free !
> UPGRADING
OF TECHNOLOGY
Instead of
finding ( in our present ITIs ) , a 20 year old lathe , we will
see most
modern machines / technologies in these new ITIs
This will tremendously
raise the Skill Level of graduating students - the
kind of
skills which will enable students to find jobs abroad
> 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
You will be justified in asking :
" How do we
know that your suggestion will transform India's Unskilled
Youth into a Demographic Dividend ? "
All I can say is :
" Luck
happens when preparedness meets opportunity . If we prepare
ourselves , opportunity will arrive , sooner than later
"
-------------------------------------------------------------------------------------
hemen parekh
18 July 2015
www.B2BmessageBlaster.com
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
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