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Budget 2017-18 | Scaling The Skills Gamut

All companies involved in developing skills should be exempted from Income Tax or Service Tax. Also, money spent by individuals on skilling should also be exempted from tax

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Vocational training to 400 million workers by 2022 is the dream that has to be turned into reality. However, efforts need to become more concentrated. Let’s be honest and accept that piecemeal approach to skill development initiatives will only result in incremental achievement rather than lead us to our target of 2022. It is also important that the policies of skill development be linked to policies in the economic, employment and social development arenas.

Skilling faces numerous challenges such as poor quality of existing institutions, low quality of schooling, lack of vocational education in schools, weak links to industry, poor linkages between formal and vocational education in schools.

The year 2016 saw a slew of initiatives to bridge the gap between the demand and supply of skilled workforce including laying the foundation of the country’s maiden Indian Institute of Skills at Kanpur. Echoing the sentiments of  Prime Minister Narendra Modi, we do need Skill, Scale and Scope to realize and make the most of our demographic dividend. Therefore, as done in the previous budget, the gamut of offerings for the Skill India Mission and the sector at large will have to expand.

In this budget, we expect a paradigm shift in government’s outlook on the skills sector. A proactive budget and policy initiatives will help garner much-needed momentum for the mission. There is need to create more accredited vocational training institutes at distinct territorial locations for skills which are in short supply. In addition, the allocation for National Skill Development Corporation should be enhanced to help training and skill development among the youth.

It is critical to evaluate and then create models that will help the future generation to join the workforce in the next decade. The need of the hour is to encourage massive involvement of PPP models and a shift in mind-set that big and private players like us will participate will only act as enablers. The private players need to lay emphasis on creating a balance between industry-specific training as well as life skills to enable a rounded development of an individual. Constant involvement and engagement with the industry will also lead to constant upgrading of content as per the industry demands. The PPP model can also act as an enabler in making vocational training affordable and accessible in the rural areas of our country.

The industry can also make its direct contribution to the mission through their Corporate Social Responsibility budget for employability skills training, bringing in much-needed financial support and building additional capacity. However, the upcoming budget should introduce an incentive or a mechanism for corporates, which encourages them to spend larger parts of their CSR budgets for vocational training in a transparent manner.

We again reiterate that 200 per cent tax benefits should be given to companies' spending money on CSR to incentivize them for spending on the segment. To further encourage large participation, the government should match the CSR funds being spent on skill training. Introducing industry friendly tax benefits will boost spend in the sector.

We urge that all companies involved in developing skills should be exempted from Income Tax or Service Tax. Money spent by individuals on skilling should also be exempted from tax. Provision of fiscal initiatives in the private sector in order to smoothen the setting up of vocational and skill development institutions by private players like us will go a long way in redefining the fortunes of the sector.

One of the most anticipated and much-needed policy reforms this year would be the implementation of GST that is promising to change the entire taxation landscape in the country. We propose that all skilling projects and schemes under the central ministry, NSDC and those being run by other state governments should be under GST exemption list to boost skilling initiatives.

Transition to a cashless economy through demonetisation will also have to be given some cushioning to avoid hurdles in skilling programmes, which are usually targeted at the grass-root levels.

Further, to attract a wider youth population to get enrolled in the skilling initiatives will require engaging and attractive campaigns to facilitate placements and motivate the target population to invest in getting themselves skilled. Initiatives by the government to build social acceptance and industry buy-in for skills development will benefit the sector. There is also a wider recommendation of apprenticeship development and discussions with industry. An urgent re-engineering of the skill ecosystem will help the mission achieve its target.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Sanjeev Duggal

Mr Sanjeev Duggal is CEO & MD of Centum Learning and Co- Chairman of FICCI Skill Development Forum. A sociologist by education, he is instrumental in transforming the perception of skills development from need-based to a necessity in India. His passion for people development and entrepreneurship led to the creation of Centum Learning in 2006. Today, Centum is recognized as one of the foremost multinational training and skills company with a presence that spans 21countries.

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