Indian Skills Training May Be Allowed as Part of CSR Spends for Emerging Sectors

The Indian government is considering widening the scope of Corporate Social Responsibility (CSR) spending to help grow skilled talent on green jobs and emerging sectors including electric vehicles, renewables, and solid and liquid waste management through a common fund scheme by employers. 

CSR spending is a fund that companies use to integrate social and environmental responsibilities into their business strategy. It applies to most companies in India and must contain 2% of the average net profits made during the preceding 3 years. The government regulates what activities are allowed under the CSR scheme. Activities benefiting employees of the company shouldn’t be permitted according to the law. 

Last month, The Ministry of Skills Development and Entrepreneurship proposed the ‘Gift a Skill’ concept where employers can sponsor skill development of individuals, not employees, through “skill vouchers”. The goal is to increase the country’s talent supply on green jobs, and emerging sectors such as electric vehicles, solid and liquid waste management, and renewable energy. 

The government agency further shared that they would conduct analysis on estimating job losses in traditional sectors and demand for skilled professionals across emerging sectors. The country is facing a shortage of skilled workers. At present only 21.2% of labor force in India are skilled compared to 99.9% in Japan, 86% in South Korea, and 85.7% in France.

Outlook: Even though this initiative is not to solve employers’ talent challenges in the short run, it can help the countries’ talent pipeline for the long term.