New Delhi: After amending the Apprentices Act recently, government on Monday stressed on the need for encouraging MSMEs to engage more apprentices, saying the sector could then be looked at as "Maximum Skillers Major Employers".
"The Government has introduced an amendment to the Apprenticeship Act. We need to find ways to encourage the MSME organisations to engage apprentices. The power of this idea is huge.
"If each of the 44 million MSME organisations engages one apprentice each year for the next eight years, the target of 500 million would easily be achieved. The MSME sector could be looked at as Maximum Skillers Major Employers," said Sarbananda Sonowal, minister of state for Skill Development and Entrepreneurship at the Mega MSME Summit cum Fair.
Saying that MSMEs play a pivotal role in the overall industrial economy of India, the Minister said that there are 44 million MSMEs in the country accounting for almost 90% of the workforce in the non farm sector and more than 80% of the total number of industrial enterprises in India. He said in terms of value, the sector accounts for 45% of the manufacturing output and 40% of the total export of the country and employs over six crore people.
He rued about the fact that the number of local entrepreneurs being created every year in India is very low. "According to a World Bank study on Entrepreneurship in 2010 which compares the new business registration density of South Asian countries with the rest of the world, it was found that contrary to popular belief, India has too few entrepreneurs for its stage of development, even compared to countries such as Thailand, Brazil and Malaysia," he said.
He said some critical factors that affect overall entrepreneurship are education and skill levels, quality of local physical infrastructure, household banking quality, business environment and investment climate.
He added that the 31 Sector Skill Councils set up by the National Skill Development Corporation are in the process of developing a number of standards for different job roles. "Sixteen sectors have already completed standards for job roles that account for 80 percent of the workforce in their sectors. As a mandate given to each SSC, they are to have representatives from the MSME Sector.
"Eighteen sectors have already done so and others are in the process of identifying the MSME representatives. Over 800 such job roles have been already finalised. However, the participation of MSME employers and industry associations in the skill development has to be greatly enhanced," Sonowal said.
He said the Sector Councils should also increase their outreach to the MSME sector Simultaneously and it should also engage with the SSCs. This process will result in enabling forward planning for emerging skills, he said.
Saying that "appropriately" skilled workforce is one of the biggest impediments for growth of MSME sector and competitiveness, he said that skill development capacity needs to be scaled up and traditional skill delivery models and approaches need to be overhauled and aligned with requirements of unorganised workforce as well as MSME employers.
"Skill development initiatives need to be integrated with secondary and intermediate level education. This will address the challenge of low education levels and also provide school dropouts with employability skills," the minister said adding that the government will take forward the implementation of the National Skill Qualification Framework.
Saying that manufacturing is not perceived as an attractive sector for employment by youth especially those with a class 10 and above education level, the Minister said that within manufacturing, the MSME segment is least preferred due to largely unorganised form of employment and stressful working conditions.
"Industry has to change this perception if it would like young persons to join your companies and stay with you. The profile of the MSME workforce - high proportion of unorganised and informal employment, low education levels, irregular working hours, socially disadvantaged background - results in high entry barriers for the workforce to access formal skill development institutions," he said.
He said that MSME employers are reluctant to invest in skill building as skilled workers will demand wage premiums while another reason for reluctance towards skill development among MSME employers is the fear of poaching of skilled employees by local competitors.