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,”
