Published On: Fri, Mar 16th, 2012

Government doubles National Skill Development Fund in Union Budget

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Union Finance Minister

To strengthen skill development initiative in the country, the Government has doubled allocation under the National Skill Development Fund (NSDF) and launched a credit guarantee fund for skills development.

InĀ Union Budget for 2012-13, Rs 1, 000 crore has been infused into NSDF raising the corpus of the fund to Rs 2,500 crore.

“This will allow NSDC to fund more sustainable skills training initiatives that can benefit millions of youth nationwide,” said NSDC Chief Executive Officer and Managing Director Dilip Chenoy.

Finance Minister Pranab Mukherjee has also exempted vocational training institutions from service tax and provided tax benefits to manufacturers for costs incurred in talent development.

In 2011-12, NSDC approved 26 new projects, doubling the number of sanctioned projects since 2009 to 52, with a total funding commitment of Rs 1,205 crore. At the end of 10 years, these projects are expected to train 62 million people.

The Budget has also proposed to provide weighted deduction of 150% of expenditure incurred on skills development in manufacturing.

“The thrust on skill development in traditional sectors, including handloom, will ensure that these sectors can improve their way of operations significantly,” Chenoy said.

“Since skills development is a building block for the economy, the budget proposal reflects the government’s commitment. This is vital since in a year almost 12 million people join the country’s labour market, many of whom are semi-skilled workers who would now get meaningful work,” said E Balaji, MD & CEO of HR and placement firm Ma Foi Randstad.