Guarantee Skills…

…At the finance minister’s pre-budget interaction withe economists, Shubhashish Gangopadhyay, head, India Research Organisation, suggested linking the proposed national rural employment guarantee to vocational training.

The proposal is based on the premise that the supply of unskilled labour is very high and the wage they command very low. On the other hand, the demand for specific skills is very high, and often unmet. For instance, simple skills like water-proofing, fencing or scaffolding are in short supply in the construction sector.

Therefore, unskilled labour has to be converted to skilled labour. This requires trainers and training infrastructure. And for their skills to be recognised and accepted by potential employers, the training will have to be certified to be of a minimum standard, by a credible authority.

It is estimated that the cost per person for this training will work out to around Rs. 5,000. For a comparison, the amount being annually committed for every unskilled labourer under the National Rural Employment Guarantee Programme (NREG) is Rs. 10,000 (at Rs. 100 per day for 100 days).

According to finance ministry sources, this was one of the few proposals on which the minister sought more information. “The proposal made sense since it will make the NREG programme more than just a dole. It can equip the NREG candidate with a new skillset so that he no longer requires the guarantee”, explains the official.

From Business World
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I like this idea. For sure, there are many simple skills that are unmet in India. And while the NREG may be necessary and possibly implemented as is, it is worth investing in such simple skilling.

I have been strongly influenced by E.F. Schumacher’s writings on Intermediate technology (“Small is Beautiful” is a book I would urge everyone to read) – primarily because I believe that excessive focus on efficiency and automation is not what an economy with a population of 1.1 billion needs. There are no easy answers to socio-economic issues, truth to tell, in some cases (as I have been realizing), there are possibly no answers at all.

But as an economy stands at the cusp of transformation – like we do now, every decision taken is a strong push in a particular direction. And while we need decisions that sustain our gains from globalization – i.e. an upwardly mobile urban elite, we also need decisions that provide a leg up for the not so fortunate. In India, the unbecoming vulgarity of the exploitation of an unskilled labour market will not fade without government interventions such as possibly the suggestion above.

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Posted on January 29, 2005, in Uncategorized. Bookmark the permalink. Leave a comment.

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