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Explain the News

Discussing Budget 2016-17 | Skills and Job Creation

In this section, we will deal with the sector which seeks to empower the youth – Skills and Job Creation.

Take a look at basic statistics, which will give you a larger picture about govt.’s approach towards Education, Skills and Job Creation, where the emphasis is to make India a knowledge based and productive society:

  • 1500 Multi-skill training institutes to be set up
  • Objective to skill 1 crore youth in the next 3 years under the PM Kaushal Vikas Yojna
  • National Skill Development Mission has imparted training to 76 lakh youth


Focus Areas

#1. Skill India Mission

The National Skill Development Mission has created an elaborate skilling eco-system and imparted training to 76 lakh youth. Govt. will set up 1500 multi-Skill training institutes across the country, to capitalise our demographic advantage.

Govt. will further scale up Pradhan Mantri Kaushal Vikas Yojna to skill one crore youth over the next 3 years.

Benefits: The emphasis on skill development will resonate with India’s youth seeking to improve their employability quotient.

Career Portal

Govt. had launched National Career Service in July, 2015, where 35 million jobs seekers have registered. Govt. will make 100 Model Career Centres operational by the end of 2016-17. It will also inter-link State Employment Exchanges with the National Career Service platform.

New Initiative


Govt. will set up a National Board for Skill Development Certification in partnership with the industry and academia.

Benefits: This will help formally skilled youth to be recognised for employment purposes in public & private sector.

Massive Open Online Courses

Entrepreneurship education and training will be provided in 2200 colleges, 300 schools, 500 govt ITIs and 50 vocational training centres through Massive Open Online Courses. Govt. will make efforts to connect aspiring entrepreneurs, particularly those from remote parts of the country, to mentors and credit markets.

Job Creation

Govt of India will pay the Employee Pension Scheme contribution of 8.33% for all new employees drawing a salary of up to Rs.15,000 a month and enrolling in EPFO, for the first 3 years of their employment.

Govt. will amend Income Tax Act in order to broaden the scope of employment generation incentives.

Benefits: This will incentivize the employers to recruit unemployed persons and that too in the formal sector. It could also lead to migration of informal sector workers to the formal sector. Of the 470 million plus workforce in India, less than 10% are in the formal sector.

Retail Sector

In order to simplify the regulations for the retail sector, which is the largest service sector employer in the country, Govt will circulate a model Model Shops and Establishments Bill, which can be adopted by the State Govts on voluntary basis. The model bill seeks to allow small and medium shops to remain open all 7 days a week on voluntary basis. This will help in creation of new jobs in retail sector.


  • In India, only about 2.2% of workforce had received formal vocational training. Even those who had received any form of vocational training, the majority had either acquired a hereditary skill or learned on the job
  • Without access to affordable and appropriate skills training, young people, particularly those leaving rural areas and small towns for big cities, will be stuck in low-wage, insecure jobs that will leave them in want or poverty
  • Job creation has not kept pace with India’s demographic momentum, and in the coming days, it will pose a problem for a skilled workforce

Learn about Deen Dayal Upadhyaya Grameen Kaushalya Yojana and Agency involved in Skill IndiaFollow our story on Skill India too.

PS: Please click on the green hyperlinked text to read more about the concepts. Revise and revise & feel free to ask pertinent questions.

Published with inputs from Pushpendra | Image: Finmin

Questions, suggestions and comments

  1. Pranav Pathak

    Please tag it to the thread “Annual Budget”. Will be easier to come back to revise it later


    1. Pushpendra Rana

      Pranav, we will create a separate thread for budget, where we will provide links to all the explainers on budget. But, you will have to wait till we complete all the sectors of the budget. Few more to go….

  2. Shashi Kumar

    please clarify more job creation part and 8.33%.

    1. Pushpendra Rana

      The major chunk (approx 90%) of Indian workforce is employed in Informal sector.
      Govt. wants that more and more work force should enter into formal sector. So, govt is giving incentives to private sector to provide more employment in formal sector. We don’t need to go much into technical details of Amendments in the IT Act.

      Secondly, all the employees in formal sector who are earning less than 15000/month are mandated to open a PF account, the contributions of which are made by equally by employee and employer @12% . So, govt has decided to provide 8.33% out of 12% which employer is suppose to deposit. So, this will reduce EPF burden of private companies. I hope it makes clear… Let me know, if you have any more doubt.

      1. Simran Bains

        Super Pushpendra! 🙂 I always had doubts understanding this.

      2. Shashi Kumar

        thanks. got ir now

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