The Gist of Press Information Bureau (PIB): December 2014


The Gist of Press Information Bureau: December 2014


Government committed to achieve PM’s vision for Skill Development

Worldwide, MSMEs have been accepted as the engine of economic growth and for promoting equitable development. MSMEs constitute over 90% of total enterprises in most of the economies. They are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports.

In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. It is understood that there are 44 million MSMEs in the country accounting for almost 90% of the workforce of the country in the non farm sector and more than 80% of the total number of industrial enterprises in India. In terms of value, the sector accounts for 45% of the manufacturing output and 40% of the total export of the country and employs over 6 crore people, easily the single largest contributor in terms employment generation in the manufacturing sector. The major advantage of the sector is its employment potential at low capital cost (skill development).

On an average 4 persons are employed per manufacturing MSME. MSMEs have a higher Labour to Capital ratio than large enterprises. This is due to higher employment in MSMEs because of low levels of automation and technology deployment. The link between entrepreneurship, regional development, and job creation is very strong. But there is huge variation in entrepreneurship across states in India. Some critical factors that affect overall entrepreneurship are education and skill levels, quality of local physical infrastructure, household banking quality, business environment and investment climate.

It is well known fact of appropriately skilled workforce is one of the biggest impediments for growth of MSME sector and competitiveness. Given the training needs of incremental and existing MSME workforce, skill development capacity needs to be scaled up and traditional skill delivery models and approaches need to be overhauled and aligned with requirements of unorganized workforce as well as MSME employers.

Skill development initiatives need to be integrated with secondary and intermediate level education. This will address the challenge of low education levels and also provide school dropouts with employability skills. Increased awareness of new employment opportunities based on industry requirements in domestic and international markets should be done to encourage youth to pursue non-traditional vocations. The government will take forward the implementation of the National Skill Qualification Framework.

Manufacturing is not perceived as an attractive sector for employment by youth especially those with a class 10 and above education level. Within manufacturing, the MSME segment would be least preferred due to largely unorganized form of employment and stressful working conditions. Within the MSME segment, services sector would be generally preferred by job seekers. Industry has to change this perception if you would like young persons to join your companies and stay with you.

The profile of the MSME workforce – high proportion of unorganized /informal employment, low education levels (Class 8 below), irregular working hours, socially disadvantaged background – results in high entry barriers for the workforce to access formal skill development institutions. MSME employers are reluctant to invest in skill building as skilled workers will demand wage premiums. Another reason for reluctance towards skill development among MSME employers is the fear of poaching of skilled employees by local competitors.

For the MSME workforce in rural and semi-urban locations, the lack of physical access to skill development institutions is an additional barrier. The penetration of skill development institutions which can impart training in skills required by local economy at block and village levels needs to be increased tremendously. Our Government will work towards enabling this to happen. The Finance Minister in his budget speech has outlined the Skill India Mission that would focus on job roles like welders, operators, plumbers, masons, cobbler and artisans etc. The 31 Sector Skill Councils set up by the National Skill Development Corporation are in the process of developing a number of standards for different job roles.  16 sectors have already completed standards for job roles that account for 80% of the workforce in their sectors. As a mandate given to each SSC, they are to have representatives from the MSME Sector. 18 sectors have already done so and others are in the process of identifying the MSME representatives. . As you have heard over 800 such job roles have been already finalised. However, the participation of MSME employers and industry associations in the skill development has to be greatly enhanced. Simultaneously, the Sector Councils should also increase their outreach to the MSME sector. MSME sector should also engage with the SSCs. This process will result in enabling forward planning for emerging skills.

MSMEs should enlarge the areas of their engagement for  example with the largely untapped but immense potential of food processing industry, because while a lot of small  entrepreneurs are already engaged in identical activities, systemic interventions like planned upgradation of skills can easily align them with this sector.

India’s young demographic strength highlighted by G-20 Chair at Labour Ministers’ Conference in Australia 

“India is one of the most youthful population of the world. 58% of our population is below the age of 29 years. The population dependency ratio is declining and is expected to rise only after 2030,” said Shri Narendra Singh Tomar, Union Minister of Labour & Employment in his address to Labour Ministers of G-20 countries. The fact was also acknowledged by the G-20 Chair during the Labour and Employment Ministerial conference of G-20 Nations, held on September 10-11, 2014, at Melbourne Australia. The Labour Ministers of the major 20 economies in the world are discussing the global issues relating to labour in this two-day conference. 

Government of India is taking proactive measures to create employment opportunities for people with disabilities and other disadvantaged groups through 21 Vocational Rehabilitation Centers. A national Scheme ‘Recognition of Prior Learning of Construction Worker’ has been prepared by MoLE to evaluate skills and knowledge acquired informally and addresses them through Skill gap training for 15 days. Active labour market policies (ALMPs) in our country are recognized as an important strategy. Under National Career Service (NCS) project, Public Employment Exchanges are being revamped into Career Counseling Center for assessing local job scenario and organizing job fairs for efficient placement. Government of India is taking affirmative policy measures to simplify the labour laws. “We believe that G 20 can serve as a policy platform for exchanging best practices and knowledge sharing for creation of better jobs and boosting participation in the World of Work,”

Mr Tomar also mentioned that Industry and commerce are the two areas having maximum potential of employment. We feel that employers have a big role to play to address our concern of jobless growth. Therefore, this G20 conference besides appealing to governments should also appeal to employers that in addition to profit-earning, they should focus more on employment generation in the course of their business expansion. 
While speaking in a session on “Creating better jobs”, Shri Tomar further said, “Employment generation is India’s biggest challenge today. In the last decade, the rate of employment growth was less than 1%. Youth unemployment rate is 6.6% and underemployment rate is touching 5.7%. Every year almost 10 million people enter labour force in India. A large informal sector, lower participation of women in labour force, increasing the productivity of labour and providing social protection to the vulnerable sections are our main challenges. Creation of commensurate health and educational infrastructure for them is our highest priority so that we can reap our demographic dividend for growth and prosperity.” 

93% of India workforce is in unorganised Sector. A large portion of it is self-employed. Social protection to these groups is our priority. We are revamping our flagship scheme RSBY. Presently 38.5 million families have so far been benefitted by this cashless health insurance. We are trying to improve the quality of service through advanced IT infrastructure. Besides increasing the coverage of the scheme it is also proposed to seed the bank account details and unique citizen ID into the RSBY smart card. Flexibility is provided to provinces to ride their social security scheme on RSBY platform. In another important initiative we have also started a pilot project for convergence of 3 important social security schemes, life insurance, old age pension and health insurance at a single point of contact for unorganised workers through RSBY smart card. 

Promoting financial inclusion is the priority of our government. The Prime Minister of India, Shri Narendra Modi inaugurated the scheme for universal access to banking facilities called “Jan Dhan Yojna” in the last week of August. 15 million bank accounts were opened on the first day of the scheme. The schemes targets to open 75 million bank accounts by the end of January 2015. In the organised sector, we are now going to provide portability of provident fund through Universal Account Number. The initiative will benefit each of the more than 40 million subscribers. Now a minimum pension is also guaranteed. 

We are amending our labour laws in order to encourage investment, ease of doing business and entrepreneurship. Amendments have also been proposed to enhance safety at workplace and working conditions especially for women. Use of Personal Protective Equipment has been made mandatory for hazardous industries. Amendment in legislation has also been proposed to allow night work for women. This would promote participation of women in labour force. We are also working on Minimum age of employment, and to provide a mandatory national floor level of minimum wages. We are also in process to draft a single law for MSME to increase formalisation. 

Joint Statement on the State Visit of Prime Minister of Australia to India 

The Prime Minister of Australia Mr Tony Abbott paid a State Visit to India from 4-5 September, 2014 at the invitation of Prime Minister Shri Narendra Modi. The Prime Ministers welcomed the signing of the bilateral Civil Nuclear Cooperation Agreement as a concrete symbol of the bilateral partnership. They noted the Agreement would enable the sale of Australian uranium to support India’s growing energy needs and directed the negotiators to conclude the Administrative Arrangements at an early date. Economic Engagement. The Prime Ministers noted the expanding bilateral dialogue on economic policy, including in areas such as taxation, competition, financial sector regulation and infrastructure. 

Defence and Security Cooperation 

The Prime Ministers reaffirmed their desire for a peaceful, prosperous and stable Asia-Pacific region, underpinned by cooperative mechanisms. They emphasised their interest in building closer cooperation in the maritime domain. The Prime Ministers committed to strengthening the defence and security partnership. They welcomed growing cooperation in defence, counter-terrorism, cyber policy, transnational crime, disarmament and non-proliferation, humanitarian assistance, disaster management and peacekeeping. They called for deepening the framework of defence and security cooperation to guide the bilateral engagement in these and other priority areas. The Prime Ministers, noting that both Australians and Indians have been victims of terrorism, commended the work of the Joint Working Group on Counter-Terrorism, including discussions on cyber security and the growing collaboration against the threat posed by terrorist groups. They noted the ongoing cooperation in combating illegal migration. 

Cooperation in Energy, Science, Water, Education and Skills 

The Prime Ministers agreed to deepen the cooperation between both countries on energy security through a Ministerial-level dialogue. They agreed to develop a strategic partnership on energy and resources based on long-term, sustainable and reliable supply of Australian resources based on India’s energy needs. They agreed that cooperation on energy - extending to coal, LNG, renewables and uranium-and on resources such as iron ore, copper and gold were key elements of the relationship and committed to intensifying these links. The Prime Ministers welcomed the success of the Australia-India Strategic Research Fund, which has provided a high impact knowledge partnership through science and technology cooperation, and announced an extension of the Fund for a further period of four years on the basis of matching commitments and reciprocity with an increasing focus on commercialisation of research outcomes. The Prime Ministers welcomed the Australian Government’s New Colombo Plan initiative, under which young Australian students would study in institutions in India, thereby furthering youth and academic exchanges and promoting contacts. 

The Prime Ministers recognised that rapidly growing people-to-people links underpin our developing partnership and will enable both countries to build even stronger relations into the future. They noted with appreciation that the Indian community is contributing significantly to the economic and social life of Australia, with India now the largest source of skilled migrants to Australia. The Prime Ministers noted that arts, culture and sports can be powerful forces for bringing people together and called for closer and more intensified exchanges in the fields of culture and creative arts, including visiting exhibitions and professional training and exchanges. They welcomed the establishment of ICCR Chairs of Indian Studies in five Universities in Australia to promote academic and student exchanges and Australia’s support in the establishment of a Nalanda University Chair in Environmental Studies. They also welcomed the signing of an MoU on Sports Cooperation that would facilitate greater exchanges, including on sports training. 

The following bilateral memoranda of understanding were signed in the presence of the two Prime Ministers: 

i. Cooperation in the Peaceful Uses of Nuclear Energy 
ii. MOU on cooperation in Sport 
iii. Renewal of MOU on cooperation in the field of Water Resources Management 
iv. MoU on Cooperation in Technical Vocational Education and Training (TVET) 

Prime Minister Mr Tony Abbott renewed his invitation to Prime Minister Shri Narendra Modi to visit Australia. Prime Minister Modi accepted the invitation to undertake a bilateral visit to Australia at the time of the G20 Summit in November 2014. Both sides agreed that the visit of Prime Minister Modi to Australia will lead to strengthening of the cooperative relations between the two countries, and will provide further impetus for the future development of the strategic partnership. 

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