Union finance minister Arun Jaitley on Monday laid out the objective of skilling one crore youth over the next three years and announced a raft of measures, including setting up 1,500 multi-skill trai
Union finance minister Arun Jaitley on Monday laid out the objective of skilling one crore youth over the next three years and announced a raft of measures, including setting up 1,500 multi-skill training institutes and National Board for Skill Development Certification in the Union Budget. He also announced steps for creating new jobs in the economy as the government will pay 8.33 per cent of wages to EPS on behalf of employers for workers during first three years of employment, and has given Rs 1,000 crore for the same. Mr Jaitley described “education, skills and job creation” to make India a knowledge-based and productive society as one of the “nine pillars” that will transform the country. The minister earmarked a sum of Rs 1,700 crore for setting up 1,500 multi-skill training institutes in the country and scaling up Pradhan Mantri Kaushal Vikas Yojna.
“We have decided to set up National Board for Skill Development Certification in partnership with the industry and academia. We propose to further scale up Pradhan Mantri Kaushal Vikas Yojna to skill one crore youth over the next three years,” Mr Jaitley said. He further proposed to exempt service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by ministry of skill development and entrepreneurship.
Besides, the weighted deduction for expenditure on skill development projects under section 35CCD of the Income-tax Act will continue up to April 1, 2020. “It is proposed to amend section 35CCD of the Income-tax Act so as to provide that the weighted deduction of 150 per cent shall be available up to financial year 2019-20 (assessment year 2020-21). “However, the deduction under the said section shall be restricted to 100 per cent from financial year 2020-21 (Assessment Year 2021-22),” Mr Jaitley said.
The minister said entrepreneurship education and training will be provided in 2,200 colleges, 300 schools, 500 government ITIs and 50 vocational training centres through massive open online courses.
Terming the Budget for skill development as “highly encouraging”, Union skills development and entrepreneurship minister Rajiv Pratap Rudy said the 1,500 multi-skill training institutes will basically be the new generation ITIs set up in public-private-partnership (PPP) mode.
“So far we have just had standalone government or private ITIs. These will be set up in those blocks and districts of the country which are yet to focus on skill development. We are also certain and committed to achieve our target of skilling one crore youth over the next three years under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY),” Mr Rudy said.
For creating new jobs, the government has decided to pay 8.33 per cent of wages to EPS on behalf of employers during first three years of employment, and has given '1,000 crore for the same.
The decision will be a big relief for employers as they are required to make mandatory contribution of 8.33 per cent of employees’ basic wage towards EPS. “In order to incentivise creation of new jobs in the formal sector, the government will pay 8.33 per cent to EPS for all new employees enrolling in EPFO for the first three years of employment,” Mr Jaitley said.
This will incentivise employers to recruit unemployed persons and also bring into books the informal employees, he said. “In order to channelise this intervention towards target groups of semi-skilled and unskilled workers, the scheme will be applicable to those with the salary of up to Rs 15,000 per month. I made a provision of Rs 1,000 crore for this scheme,” the minister said.
The Budget 2016-17 also proposed to bring in liberalised scope of employment generation incentives available under 80JJAA of the Income Tax Act. The minister said that the deduction will be available not only to assesses deriving income from manufacturing of goods in factory but all assessee subject to statutory audit.
“Thus deduction of 30 per cent on the emoluments paid to such employees can be claimed for three years. This minimum number of days for which they should be employed during the years is proposed to be reduced from 300 to 240 days,” he added.
