Companies to divert CSR funds in skill development, education and jobs creation; how it will benefit youth and industry, Fiinovation brings out the insights
With a view to push higher education, skill development and employment generation across the country, #UnionBudget2016 has outlined a robust roadmap that will boost industry participation, streamlining of start ups and will attract CSR spending in the areas of skill development and job creation. Fiinovation highlights the Finance Minister, Arun Jaitley’s budget speech where he has earmarked focus areas of development that will infuse fresh energy into higher education, rejuvenate skill development initiatives through industry participation and institutionalizing Startups for job creation.
Starting with higher education, government has decided to set up a Higher Education Financing Agency (HEFA) with an initial capital base of Rs 1,000 crores. The HEFA will be a not-for-profit organisation that will leverage funds from the market and supplement them with donations and CSR funds. Fiinovation contemplates that these funds will be further used for the improvement of the infrastructure of the top institutions and may be serviced through internal accruals.
Now, moving towards skill development, the budget has allocated Rs 1,700 crores, that will be used to set up 1,500 multi-skill training institutes across the country that is expected to fill the gaps of the skilled labour substantially. Government will also set up a National Board for Skill Development Certification in partnership with the industry and academia. It is also proposed to further scale up Pradhan Mantri Kaushal Vikas Yojna to skill one crore youth over the next three years. Also, entrepreneurship, education & training will be provided in 2200 colleges, 300 schools, 500 government ITIs through massive open online courses.
If we take a look at the fiscal year 2014-15 , education and skill development were the key areas that attracted large CSR spending. Official data from the Ministry of Corporate Affairs (MCA) suggests that a total of Rs 6,338 crore was spent on CSR by 460 companies in FY15, and education and skill development attracted 23% of the CSR spending.
Budget made a special mention of Startups as they help in generating employment, bring innovation and are expected to be key partners in ‘Make in India’ programme. So, budget has proposed to assist their propagation through 100% deduction of profits for 3 out of 5 years for startups set up during April 2016 to March 2019. Although, Minimum Alternate Tax (MAT) will apply in such cases, the capital gains will not be taxed if invested in regulated/notified fund of funds and by individuals in notified start-ups, in which they hold majority shares.
The budget has also brought out an intelligent intervention to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees enrolling in EPFO for the first 3 years of their employment. A budget provision of Rs 1000 crore has been earmarked for this scheme. This will push the employers to recruit unemployed persons and also to bring into the books the informal employees.
Retail trade, being the largest service sector employer in the country has the potential to create substantial number of jobs provided that the regulations are friendly and simplified. Budget raised the point that if shopping malls can be kept open for all seven days then why not the small and medium shops? Fiinovation contemplates that if small and medium shops can open their shutters for all seven days, firstly it will benefit the shop owners as more commercial activity will attract more cash inflow for business expansion. Secondly, it will create more opportunities for hiring of skilled/semi-skilled labour. However, the budget has also proposed that these shops can be given the choice to remain open on all the seven days on voluntary basis and evaluate the interest of the workers and options accordingly.
Fiinovation understands that the budget has accommodated the concerns of the youth and industry to a greater extent and has set the road-map for inclusive growth but what is to be seen that how the budget recommendations get translated into reality. Fiinovation urges industry leaders to extend their valuable support to the budget recommendations for making India, a land of opportunities and an example for others to follow.
#BudgetForAll, #SkillBasedJobs #SkillDevelopment #JobCreation #YouthPower #CorporateInclusion #CSRSpending
By – Rohit Kaul
Media & Communications – Fiinovation