Skilling and Job creation get additional support
India is redesigning the corporate social responsibility architecture by strengthening its foundation while reposing faith in the industry to become part of the solution for two major problems—an unskilled workforce and growing unemployment. It is a well-thought-out and dynamically designed scheme that empowers those who wish to use their CSR more meaningfully. It has broadened the scope and specified the responsibility of CSR, but has ensured that the soul of the scheme is pure and to help drive the country’s economy up and high.- M.Rajendran
In its third consecutive Union Budget, the NDA Government has redefined the Corporate Social Responsibility (CSR) for corporate, ensuring that they are partners in the job creation and training of youth in India.
The Government’s decision is bound to impact the skilled workforce’s growth tremendously. Union Finance Minister Nirmala Sitharaman, who presented the Budget in July 2024, announced that the Government would soon launch a comprehensive scheme for providing internship opportunities in 500 top companies to one crore youth in five years.
This scheme bridges the gap between academic knowledge and industry requirements, empowering young individuals with practical experience and financial support. It aligns with broader goals of improving employability, stimulating economic growth, and promoting sustainable development.
For the first time ever, the Union Budget 2024 uses CSR to focus significantly on employment-linked schemes, setting a new precedent for prioritizing job creation and skilling in our nation. This landmark budget introduces innovative approaches to directly link incentives with employment generation, ensuring economic growth translates into real, tangible opportunities for our youth.
Under the CSR Project, the youth in the country will be exposed for 12 months to real – life business environments, varied professions and employment opportunities. An internship allowance of Rs.5,000 per month and a one-time assistance of Rs.6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR funds.
The amount under Corporate Social Responsibility (CSR) is allocated and utilized by various Companies in accordance with the broad framework provided by the Government under section 135 of the Companies Act, 2013 (‘Act’) and Companies (CSR Policy) Rules, 2014, as amended from time to time. The Act, inter-alia, stipulates that companies exceeding the threshold limits, as specified in the Companies Act, 2013, have to allocate at least 2% of the average net profits of the company made during the three immediately preceding financial years for CSR activities.
A company’s board is empowered to plan, decide, execute, and monitor the company’s CSR activities. Schedule VII of the Companies Act indicates the activities that can be undertaken by the companies, which, among other things, include health care, education, and rural development projects. Further, the first proviso to section 135 (5) of the Act provides that the company shall prefer local areas and the areas around it where it operates. No funds are received from State Governments under CSR.
The scheme will be applicable to youth who are not employed and not engaged in full-time education. Youth aged between 21 and 24 will be eligible to apply.
The scheme has been designed with the Government and industry sharing the cost per annum: The Government will allocate Rs. 54,000 towards monthly allowance (plus a Rs.6,000 grant for incidentals). The corporate will share Rs. 6,000 from CSR funds towards a monthly allowance.
As part of its CSR activities, the industry will have to include the training cost allocated from the Company ‘s CSR funds. The administrative fees are to be borne by respective parties (for the company, reasonable administrative expenses can be counted as CSR expenditure).
To ensure that the scheme is not undertaken as a compulsion, since such an effort could prove counterproductive, the Government has kept the participation of companies as voluntary. Industry observers feel that such an approach will produce quality output, and more companies already doing philanthropic activities would join, even if they are not covered under the mandatory CSR mandate as per the Supreme Court mandate.
The applications are through an online portal. The company is to select from a shortlist, which is a shortlisting based on objective criteria with emphasis on those with lower employability.
The scheme also ensures that there is no ambiguity in the selection of candidates; the government has upfront given an indicative list of ineligible candidates. It includes candidates with IIT, IIM, IISER, CA, CMA, etc. as qualifications. Further, any family member assessed to Income Tax or any family member who is a government employee will not be eligible for the scheme.
As per the scheme, the company is expected to provide the person with actual working experience in a skill in which the company is directly involved. Such candidates should at least half the time be in actual working experience/job environment, not in the classroom. If the volunteering Company cannot do so directly, it must tie up with companies in its forward and backward supply chain (e.g.suppliers or customers) or other Companies/Institutions in its Group; otherwise, they can coordinate with State Government initiatives wherever applicable.
The scheme will have two phases:
Phase one of the scheme will be for two years, followed by Phase two for three years. The government has, however, indicated that the details of the schemes are subject to modification during the appraisal and approval process.
The Skill India Digital Hub (SIDH) is the unified platform for the Indian skilling ecosystem. Individuals can explore and enrol in skill programs and courses offered by the central government, state governments, corporate social responsibility (CSR) initiatives, and private partners.
SIDH is a comprehensive digital plat form that synergizes and transforms India’s skills, education, employment, and entrepreneurship landscape.
SIDH is also integrated with the National Institute for Entrepreneurship & Small Business Development’s (NIESBUD’) UdhyamKart to list products of NIESBUD’s trained entrepreneurs and empower small businesses.
SIDH offers multiple skill courses in partnership with industry stakeholders and educational institutions. Industry stakeholders include Sector Skill Councils (SSCs), Boston Consulting Group (BCG), Cisco, Coca Cola, GUVI, HCL Technologies, IG Drones, Microsoft, NSDC, Quest Alliance, Tech Mahindra. Educational Institutions / Ed-tech partners include Ajinorah, DeakingCo., IGNOU, Tutorials Point, Manupatra Edutech, and Upgrad. These collaborations help enhance the effectiveness of SIDH courses and ensure an increase in the adoption.
It represents the aspirations of millions of Indians seeking better opportunities by providing access to industry-relevant skill courses, job opportunities, and entrepreneurship support. As the Digital Public Infrastructure (DPI) for Skilling, Education, Employment, and Entrepreneurship, SIDH serves as a comprehensive information gateway for government initiatives in these domains, making it a go-to hub for citizens pursuing career advancement and lifelong learning.
The primary objectives of SIDH include facilitating digital access to skill development, integrating the skilling ecosystem, enhancing employability and entrepreneurship, promoting lifelong learning, serving as an informat ion gateway, and leveraging data-driven decisionmaking. SIDH is designed to promote the adoption of DPI in the country. SIDH is one of the most important DPIs for
India’s skill development, education, employment and entrepreneurship landscape, as it provides a foundational digital ecosystem that supports and integrates various public and private stakeholders.
The recent budget announcement also marks a historic moment for Industrial Training Institutes (ITIs) with a substantial allocation aimed at their comprehensive upgrade and enhancement. Over the next five years, 1000 ITIs will be modernized through a hub-and-spoke model, supported by a total outlay of ₹60,000 crore.
This initiative includes a new Centrally Sponsored Scheme, developed in collaboration with states and industry, to ensure that skilling outcomes meet high standards of quality and relevance. The budget breakdown is as follows: ₹30,000 crore from the Government of India, ₹20,000 crore from state governments, and ₹10,000 crore from industry contributions, including CSR funding. The upgrade wi l l i nvolve redesigning existing courses, introducing new ones, and offering specialized short-term programs at hub ITIs. Additionally, the capacity of five national institutes for trainer training will be augmented. This program is set to benefit 20 lakh students, significantly enhancing the alignment of ITI training with industry needs and creating a robust pathway for workforce development.
The Model Skill Loan Scheme will be revised to facilitate loans up to ₹7.5 lakh with a government-promoted fund guarantee. This measure is expected to benefit 25,000 students annually.
The 21st Representative of the Parliamentary Standing Committee on Finance is one of the prime movers for bringing the CSR provisions within the statute.
Enactment of the Companies Act, 2013 by the Ministry of Corporate Affairs, Government of India was one of the world’s largest experiments in introducing CSR as a mandatory provision by imposing a statutory obligation on companies to take up CSR projects towards social welfare activities. This has made India the only country that has regulated and mandated CSR for some select categories of companies registered under the Act. This CSR initiative will push the nation towards achieving sustainable development goals and public-private partnerships to transform India.
The Union Budget 2024-25 prioritizing skilling and employment highlights these aspects’ crucial role in nation-building. Skilling equips the workforce with the necessary competencies to meet industry demands, fostering innovation and productivity. Employment ensures economic stability and empowers individuals, enhancing their quality of life and contributing to overall societal progress.
Wi th one of the youngest populations, a median age of 28, India can harness its demographic dividend by nurturing a workforce that is equipped with employable skills and prepared for the needs of the industry.
Sixty-five per cent of India’s fast-growing population is under 35, and many lack the skills needed by a modern economy. Estimates show that about 51.25 per cent of the youth is deemed employable. However, it must be noted that the percentage has improved from around 34 per cent to 51.3 per cent in the last decade.
This sets the stage for discussions of various government schemes and initiatives to bolster skill development and bridge the employability gap among India’s burgeoning young population.
In alignment with these new measures, the Government continues to support established programs that have been fully supported by industry and public sector enterprises in their CSR activities. The National Policy on Skill Development & Entrepreneurship (NPSDE) continues to bridge gaps, improve industry engagement, and expand apprenticeship opportunities.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has trained over 1.42 crore individuals since 2015, integrating over 1,000 educational institutions as Skill India Centres. The Craftsmen Training Scheme (CTS), with 14,955 ITIs, focuses on long-term vocational training, showing significant female participation growth. Jan Shikshan Sansthan (JSS) targets nonliterate/neoliterates, having trained 26.36 lakh
individuals from FY19 to FY24, with women comprising 82% of beneficiaries. The National Apprenticeship Promotion Scheme (NAPS) has engaged 32.38 lakh apprentices and increased industry participation, highlighting substantial growth infemale apprentices. Entrepreneurship training is bolstered by institutions like the National Institute for Entrepreneurship and Small Business Development (NIESBUD) and the Indian Institute of Entrepreneurship (IIE), which have collectively trained 4.64 lakh individuals from FY19 to FY24. The Skill India Digital Hub, launched in August 2023, enhances access to skilled resources and integrates multiple government initiatives, engaging over 60 lakh learners.
Targeted skilling efforts extend to emerging sectors such as Green Hydrogen and the PM Vishwakarma initiative, which upskill diverse populations. Skilling India at global standards is advanced through Skill India International Centers and international partnerships with countries like Australia, Germany, etc., promoting mutual recognition of qualifications and international mobility.
Many industries have used their CSR Funds to align with the National Skill Development Corporation (NSDC) to support its initiative of innovative finance mechanisms like the Skill Impact Bond, which has trained and placed thousands of youths, including a significant proportion of women. The Directorate General of Training (DGT) partners with major corporations to provide industry-relevant skills training, preparing trainees for Industry 4.0 and beyond.
Through these initiatives, the Government addresses immediate employment needs and builds a sustainable framework for long-term skill development and job creation. This comprehensive approach aims to equip India’s youth with the necessary skills and opportunities to thrive in a rapidly evolving global economy, thereby maximizing the nation’s demographic dividend.
The corporate sector should rise above compulsory obligations and focus more on voluntary contributions for the upliftment of the nation. There is a need to inspire others to come forward and contribute to the country’s betterment while raising awareness about the areas that require attention.
The people need to know about the kinds of interventions that benefit society and those that don’t. Commending the socially conscious people, especially the corporations, for their contributions, he termed it a responsibility of the country to recognize these individuals. The corporate sector should pay attention to the efficiency of the social responsibility interventions as much as they focus on effective resource utilization for their company. They should not hesitate to adopt the best global CSR practices.
