Published by MBA Skool Team, Published on April 03, 2012
Recent times have witnessed the burning issue of the Indian Government seeking to introduce the rule of “Compulsory recruitment of the semi-skilled and skilled labour force trained by agencies like NSDC by SSI”. This has put forth a dilemma whether to maintain workers standard or go against it.
We have seen that most of the management jargon is concerned about HR management that is related only to large organizations whose employees belong to India. Let us for once, wrack our brains over employees who belong to our very own Bhaarat. The NSDC was established in 2008 with the aim of providing employment to 500 million people by the year 2022, took upon itself the task of skill development for the huge labour pool in India. While this organization has made a worthwhile start, but has a perfidious task to accomplish in order to meet its targets in next 10 years. This article strives to bring forward/assess the HR management dynamics in the rural sector which constitutes the majority of India.
The Rule of Law is the foremost thread that holds together the social fabric of a nation by guiding its subjects to act in a manner that confers the overall good. It becomes imperative to fabricate its elements wisely and use the oars of reason and rationale to steer the body politic to the shore of progress. For India, a country striving hard to sprint ahead in the race of development, a decision that affects the employment and output is a climacteric choice. The question of crafting a rule that would enforce the hiring of labour force in small scale industrial units from certain training agencies elicits an answer found by viewing the reality through a microscope.
The SSI units, characterized by their small size (value of fixed assets less than Rs 10 million), received a special impetus by the government through reservation of about 8000 products exclusively for them, exemption of central excise duty to an extent, provision of credit facilities etc. This has helped the SSI units to contribute about 45% of the total manufacturing output and more importantly, due to its high labour absorbing nature, employ almost 66 million people, justifying the government support. The lesser literate rural poor, who have gained a particular skill while striving to earn their livelihood, majorly constitute these 66 million.
With the advent of globalization, an inevitable competition on quality and efficiency took place between enterprises. The genesis of skill development schemes of the government, such as the MES (Modular Employability Scheme) and the NSDC can be traced to answer the wave of ‘quality consciousness’ and ‘competitive edge’. So far so good, but to go to the extent of enforcing the SSI units to hire only from these agencies, is not only a severe blow to their autonomy but also defeats the very purpose of empowering them at the first place. As goes the apothegm, the government solution to a problem is only as bad as the problem.
A good product sells. If agencies like NSDC produce well trained workers, then enforcement of their hiring becomes redundant. Before clutching on to this rule, which in a panoramic view might look like a noble one, we must consider its viability. Present skill development programmes have a capacity of training about 3.1 million persons whereas the annual requirement of skilled workforce in India is about 12 million persons. Advocates of this rule would conveniently leave millions of poor lurching for jobs, to create an inadequate workforce with a degree. This law would do nothing but create queues in front of training agencies, lead many people to chase few seats and beget bribery. It kills the incentive for the unskilled poor to develop skills while working and pushes them to hunt for a paperbound certificate. Ultimately, it crucifies the very hen of SSI sector that was born to lay the golden eggs of employment.
Some purport this law as a means to establish proper working standards for the labour force. But the only rational way of ensuring this is to effectively implement the current labour legislation and not manufacturing more laws with severe side-effects. The panacea to the twin challenges of unemployment and competitiveness is expanding the spread of vocational training and giving SSI units the opportunity to pick the manpower available in their nearby rural area and train them according to their requirements. Formal skill development albeit necessary, should not be an imposed necessity.
This article has been authored by Shefali Rattan and Siddharth Tiwari from IIT Delhi.
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