The Indian Budget 2017 – Provision for Vocational Education & Training

The Finance Minister of India, Mr. Arun Jaitely presented his budget in parliament on 2 February 2017, keeping his promises of employment generation, promoting investments and strengthening the delivery of public services. Designed around ten distinct themes including 'Energising youth through education, skills and jobs' the Finance Minister amply provisioned for existing initiatives to be scaled up and newer initiatives to be launched.

Some positive signs

The tone of this budget plan is affirmative, focused and 'mission-mode'. The budget 2017 demonstrates the government's intention to realize the 'SkillingIndia' mission by strengthening the mandate of the Ministry of Skills Development and Entrepreneurship (MSDE) through financial allocations that will support the mandate of the MSDE including the implementation of programmes.

The speech also highlights the skills gaps for both industrial and and small and medium-sized enterprises as well as home-based and mobile enterprises, and the need for dedicated programmes to address this challenge. It reiterates the Prime Minister's vision that young Indians have to be prepared not for the domestic but also for the international labour markets, much in the spirit of 'Making India the skills capital of the world'.

Working towards creating adequate means for nurturing the human capital is a common thread across all major topics from poverty alleviation and rural development to industrial growth. This budget weaves in the India story with the sense of urgency to reap the demographic dividend. The adequate impetus for job creation through infrastructure development initiatives creates the connection between skills and jobs.

Participating in the India growth story

Big-ticket allocations go hand in hand with the challenges of implementation. The growing employer and implementation partner network will have a key role in delivering these envisioned programmes. It is an interesting opportunity for private sector players, especially the employers and service providers, to deliver programmes at scale. However, to create an impact which is long-term and sustainable it is important to look at skills which connect youth to jobs for careers and not placements.

Such massive implementation creates a huge demand for training staff – trainers, qualification experts, analysts, product designers, technology integrators and so on - an unprecedented opportunity for our academic institutions to quickly shift gears and develop specialized programmes in applied social sciences.

Many of these niche initiatives will also require collaboration with international partners (both G2G and B2B) as the focus will now grow to be quality for competiveness.

Summary of budget allocations

Total budgeted expenditure for employment generation, skill and livelihood in the budget 2017 ~ 17,270 crore Indian Rupees (INR) (2.5 billion US Dollar (USD))

Ministry of Skill Development and Entrepreneurship allocated 3,016 crore INR (449.3 million USD)

The big announcements

  1. Pradhan Mantri Kaushal Kendras (PMKK) have already been promoted in more than 60 districts. We now propose to extend these Kendras to more than 600 districts across the country.
  2. In 2017-18, we also propose to launch the Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) at a cost of 4,000 crore INR. SANKALP will provide market relevant training to 3.5 crore youth.
  3. The next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE) will also be launched in 2017-18 at a cost of 2,200 crore INR. STRIVE will focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through an industry cluster approach.
  4. For imparting new skills to the people in the rural areas, mason training will be provided to 500,000 persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18.
  5. 100 India International Skills Centres will be established across the country. These centres would offer advanced training and also courses in foreign languages. This will help those of our youth who seek job opportunities outside the country.

Strengthening existing programmes

  1. A special scheme for creating employment in the textile sector has already been launched. A similar scheme will be implemented for the leather and footwear industries.
  2. Allocations for Deendayal Antyodaya Yojana - National Rural Livelihood Mission for promotion of skill development and livelihood opportunities for people in rural areas to 4,500 crore INR in 2017-18. The allocation for the Prime Minister's Employment Generation Programme (PMEGP) and credit support schemes has been raised more than three times.
  3. Decision to take steps to create additional 5,000 post-graduate seats per annum. In addition, steps will be taken to roll out DNB courses in big district hospitals; strengthen PG teaching in select ESI and municipal corporation hospitals; and encourage reputed private hospitals to start DNB courses.
  4. By the end of 2017-18, high-speed broadband connectivity on optical fibre will be available in more than 1,500,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. A DigiGaon initiative will be launched to provide tele-medicine, education and skills through digital technology.

Job creation : A focus for this financial year

Infrastructure development continues to be the core of the growth plan of the Finance Minister. There are several projects that have been proposed during this financial year which will not only create jobs but also a huge domestic demand of skilled and trained workforce. It is interesting that this will cut across sectors of industry and many new sectors shall benefit from the increased focus. Some examples:

 

Sector/Industry  Scheme / Programme 
Roads & Highways 19,000 crore INR for Pradhan Mantri Gram Sadak Yojana
Housing & Urban Development 23,000 crore INR allocation for Pradhan Mantri Awaas Yojana – Gramin
Renewable Energy Additional 20,000 Mega watt through Solar parks
Electronics Manufacturing Increased allocation for incentive schemes like M-SIPS and EDF to 745 crore INR in 2017-18
Rural Electrification  100 per cent villages covered by 2018
Tourism 5 Special Zones will be set up
Logistics Development of multi-modal logistics parks, together with multi-modal transport facilities
Health
  • Create additional 5,000 post-graduate seats per annum.
  • Steps will be taken to roll out Diplomat of the national board (DNB) courses in big district hospitals; strengthen post graduate teaching in select ESI and municipal corporation hospitals; and encourage reputed private hospitals to start DNB courses.
  • Two new All India Institutes of Medical Sciences will be set up in the states of Jharkhand and Gujarat.


A topic-based budget that is in line with the overall growth priorities of the country is a welcome move. All impactful programmes have been sufficiently funded keeping in mind the scale and the challenges of the outreach. There are many institutional and programmatic challenges in ensuring that the implementation is quality-driven. Industry as one of the key stakeholders must sufficiently support its councils and programmes such as Apprenticeship Schemes. To achieve the overall goal of 'Making India the Skills Capital of the World' vocational education research has to be promoted as an independent, neutral check post and greater thrust have to be provided for international partnerships.


Author: Pooja Gianchandani, German Chancellors Fellow, Guest Scientist at the Federal Institute for Vocational Education and Training (BiBB), February 2017