Interim Budget 2019 must focus on skilled labour to tackle unemployment

Intrim Budget 2019:

Budgetary allocation to the ministry of skill development and entrepreneurship (MSDE) has witnessed a 237% increase over the last four years, from Rs 1,007 crore (actual expenditure) in 2015-16 to Rs 3,400 crore (budget estimate) in 2018-19, according to ministry data.

The 2018-19 allocation, however, represents a “drastic cut” by the ministry of finance against the Rs 7,696.54 crore requested by the MSDE, due to underutilisation of funds allocated to the MSDE in previous years, revealed a parliamentary committee report in March 2018. The committee warned that the budget cut would “adversely affect various schemes” implemented by the ministry tasked with skilling India’s youth.

In November 2018, the government’s aim to skill 10 million youth under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY, or Prime Minister’s Skill Development programme) by 2020 was found to be 64% short of meeting the target. Just over 3.6 million people had been enrolled in PMKVY by November 30, 2018, government data showed. Among these, 3.39 million had received training and 2.6 million had received certification after training--66% and 74% short of the target, respectively.

There is a direct link between India’s underskilled workforce and high unemployment rates. Unemployment has been a key challenge for the National Democratic Alliance (NDA) government. The unemployment rate for people aged 15 years and above in India was 3.4% in 2013-14, which saw a further increase to 3.7% in 2015-16, according to a government reply to the Lok Sabha on July 23, 2018, which did not provide data on numbers of unemployed.The unemployment rate rose to a four year high (3.9%) in 2016-17, Business Standard reported on January 11, 2019, citing the labour bureau’s sixth annual employment-unemployment survey...Read More