Editorial: Questions over internship scheme

While the focus on employability is a step in the right direction, much will depend on the industry’s cooperation

Employment generation and skilling formed the dominant theme of the NDA 3.0’s first Budget. It was understandable because the growing unemployment was one of the key factors responsible for the BJP’s underwhelming performance in the recent Lok Sabha elections. Finance Minister Nirmala Sitharaman, who presented her seventh consecutive Budget in Parliament, laid much emphasis on the creation of jobs and skilling in her speech. One announcement that particularly stands out is the scheme for providing internship opportunities in 500 top companies for one crore youth in five years. The scheme is meant to fill the talent void and also generate initial employment for young people. An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the training cost and 10% of the internship cost from their corporate social responsibility (CSR) funds. While the industry has, by and large, welcomed the initiative, some concerns have emerged over the eligibility criteria for companies that would be selected as part of the plan, whether it will be mandatory and the basic qualifications an individual needs to have to qualify as a beneficiary. The government needs to clear the air. From a labour law perspective, anything that is not an apprenticeship falls under employment. Apprentices receive stipends and employees receive a salary. But the term used in the Budget is allowance. It is unclear what an allowance means in that context.

Broadly, this is a welcome initiative because the crippling job crisis should not be allowed to impede the growing economy. The scheme is expected to cost about Rs 66,000 crore, with each company having to shell out over Rs 13 crore. However, a section of the corporate sector is uncertain about the implementation of the scheme. There are doubts within the industry whether all the companies will be ready to execute the plan. Using the scheme, the government could be trying to incentivise lower-end job creation. These jobs can be created in sectors such as garments, leather goods, and electronics. Another important scheme focusing on skilling has been unveiled. This will upgrade Industrial Training Institutes in line with the industry’s needs. It is expected to benefit two million young people. The only snag is that, so far, such skilling education has not been effective enough to meet the needs of many sectors. There is, thus, the incongruent situation of jobs being available but not enough trained personnel to fill them. A more nuanced approach needs to be taken to such skilling programmes by involving leading agencies to improve employability. Overall, the Budget has a package of five schemes aimed at facilitating employment and skilling, with an allocation of Rs 2 lakh crore. While the focus on employability is a step in the right direction, much will depend on the industry’s cooperation.

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