New skilling scheme laudable, but needs clarity, say India Inc leaders

Officials of construction and engineering major, L&T, which has in the past complained about skilled labour shortage, said if India needs to grow, one of its positives has to be its population

While praising the internship scheme announced in the Budget, India Inc wants clarity on how it will be implemented.

The scheme is expected to help companies address the skill gap in employment.

Dheeraj Hinduja, chairman, auto major Ashok Leyland, said: “We had started an internship programme at our plant in Pantnagar, which we established in 2010 with colleges there. The government has left it to each company to see how it can support the programme. The scheme should support students in finding jobs. Our support in the programme continues in Pantnagar.”

Ramesh Alluri Reddy, chief executive officer (CEO), TeamLease Degree Apprenticeship, said the Budget’s emphasis on skill development and job creation was commendable.

But the scheme requires clarity. The lack of detailed provisions on qualifications and procedural guidelines could impede its rollout and compliance. For instance, the definition of a “premier institution” remains nebulous. This vagueness could lead to disparate interpretations and distorted implementation. Additionally, the age bracket of 21-24 lacks specificity regarding employment status and economic conditions, he said.

Sanjay Nayar, president of Assocham, and former CEO, KKR & Co’s India unit, said: “Industry is poised to benefit from the scheme … the initiative has the potential to bridge the skill gap, particularly in sectors that demand them.”

“All stakeholders will be keen to be part of the consultation process for finalising a framework for the internship scheme. While the Budget proposals provide for companies to use 10 per cent of their CSR (corporate social responsibility) funds for the internship cost, raising the CSR fund limit may even improve industry response,” Nayar said.

Officials of construction and engineering major L&T, which has in the past complained about skilled labour shortage, said if India was to grow, one of its positives was its population.

“We need to invest in health and education for all, and the tax collected should be used for this purpose. It is a positive that the government is talking about labour, and it has to be a long-term plan. If the government invests in health and education, industry will take care of the skill part,” said R Shankar Raman, chief financial officer and whole-time director, L&T.

The construction industry, which companies such as L&T and Tata Projects operate in, is facing a labour crunch of 10-15 per cent, specific to skilled labour.

Ritesh Singh, chief human resources officer, Tata Projects, is hopeful the Budget initiatives will help address some of these issues.

He said: “We undertake similar upskilling under our own schemes, using our manpower costs. With the Budget announcement, we will explore if we could utilise CSR funds for this.

“I do not expect it to add any further costs.”

Kamal Karanth, CEO and founder, Xpheno, a specialised staffing firm, said the paid internship scheme was a good start on fresher employment.

He said the number of undergraduate and postgraduate students in all streams of education in the country was between 9.4 million and 9.6 million. “With 20-23 per cent of them pursuing higher education, we see 7.2-7.5 million people entering the job market each year. Even in the most buoyant years, the high-potential tech sector absorbs only 600,000. Therefore, creating seven-eight million jobs annually is a challenge for all sectors and enterprises, with market variables high enough to question its feasibility,” he said.

A senior executive of an information-technology (IT) firm said implementing the voluntary skill scheme would be a problem.

“This will not lead to the making of a productive workforce. The other problem is overheads. For every person that comes on board the person has to be given computers, a salary, proper office space, etc. If the government is allowing companies to use CSR funds then many would just do lip service to this.”

A senior official at an industry body told Business Standard in pre-Budget meetings participants had acknowledged there was an “employment paradox” in India. “Companies are saying there are not enough people and people are saying there are not enough jobs,” he said. “The only way to bridge this gap is to involve industry and tell them to train people in the skills they want.”

Aditya Ghosh, chairman, Confederation of Indian Industry National Committee on Skills, said the scheme would enable industry to get fresh people, who could transition into full-time employees.”

With Raghav Aggarwal