Opinion | Spur CSR Funds Spending on imparting Employable Skills

It might not be enough to fill up the gaps but it will certainly make a difference if a part of the Corporate Social Responsibility (CSR) fund is spent on skill development in a focused manner for employment generation. I will strongly recommend having a CSR-funded mega, multifaceted Skill Development Centre (SDC) in every district, apart from the existing facilities, if any. It should be opened, operated and maintained by the funding firms. Equipped with state-of-the-art facilities including hostels for girls and poor aspirants, particularly those from economically and socially weaker sections of society, each SDC should be aligned with the potential areas of the district so that they do not have to move out of their homes for gainful employment.

What I am proposing is certainly not a tall order and can easily be implemented with some amount of willpower from all stakeholders. Companies have resources, infrastructure, machinery, and expertise that can support the endeavour of skill development in the country.

With due respect to all stakeholders and ongoing efforts aimed at creating a skilled workforce in the country, let me vouch for the fact that there is an emergent need to revisit our strategies and be more focused. We have around 600 districts in the country. The Government of India, in January 2018, had launched the ‘Transformation of Aspirational Districts’ initiative with a vision of a new India by 2022 where the focus was to improve our ranking under the Human Development Index, raise the living standards of citizens and ensure inclusive growth of all. A total of 117 Aspirational Districts (ADs) have been identified by the NITI Aayog, a top ranking think-tank in the public sector headed by Prime Minister Narendra Modi, and based upon composite indicators from health and nutrition, education, agriculture, water resources, financial inclusion, skill development and basic infrastructure. All of these have an impact on the Human Development Index. The year 2022 is about to end now. Certainly, we have made a great stride in these four years but a lot is yet to be achieved.

Each CSR-funded SDC will also be more particular about the empowerment of our poor citizens, women in particular. Let’s admit that the government’s efforts won’t fructify if the private sector does not take special initiatives for women and poor people and increase its spending under CSR for their skilling and upskilling. A report published by the United Nations Development Programme (UNDP) in India — ‘Corporate Engagement in Women’s Economic Empowerment’ — in 2019 found that the top 100 firms’ CSR expenditure on women empowerment was just 4 percent of the total spend of Rs 6,314.30 crore. Post-covid restrictions, several business groups seem to be working more in this direction. For instance, software companies Microsoft and Google have joined hands with several state governments to help women gain industry skills in the field of artificial intelligence, cloud computing, digital marketing, etc. so that they can benefit from Digital India and Skill India initiatives. All of this is fine, but we need to be institutionalised and work with a long term vision.

According to an official estimate, Rs 21,231 crore was spent by 21,349 companies on CSR funds in 2019-20, up from Rs 13,909 crore in 2017-18. India has seen the sharpest growth among Asian economies, with a six-position jump from 43^rd to 37^th rank on the annual World Competitiveness Index 2022, which has been compiled by the Institute for Management Development (IMD). The top-performing Asian economies are Singapore (3^rd), Hong Kong (5^th), Taiwan (7^th), China (17^th) and Australia (19^th). There will not be a shortage of CSR funds at all. Each SDC will add value to our efforts towards amplifying the skill base, which will help us scale up for sustainable job creation. ‘The Competitiveness Roadmap for India @100,’ jointly published by the Economic Advisory Council to the Prime Minister (EAC-PM) and The Institute for Competitiveness, states: “India needs to launch a new set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies. Sector and location-specific initiatives can identify the specific needs of individual clusters and regions and then select from generic policy tools to pursue a coherent strategy for growth and competitiveness upgrading.” Skills are the key to enhancing the employability of labour market entrants and reducing their barriers to getting jobs.

I would like to conclude on a note of caution and suggestion. The implementing agencies registered with the Ministry of Corporate Affairs 21 Registry should not be involved in running CSR-funded SDC. It should be done by the CSR wing of corporate houses. An analysis of CSR funds returns filings made by the companies reveals that of the total annual CSR spent, approximately 60 percent of the expenditure has been done through implementing agencies. It is not to question the capability of implementing agencies but to make sure that SDCs are not run in a half-hearted manner. We have to visualise the cost of not having the required number of skilled employable workforce in the market. As ‘The Competitiveness Roadmap for India @100’ report points out that “Labour mobilisation has been falling over time, especially since 2005 when job creation dramatically decreased… large firms have driven productivity growth but not job creation and the majority of employees are stuck in small, low productivity, and low growth firms.”

The upward movement of employees will be possible only when they have skills, which are continuously updated and upgraded. We are caught in a catch-22 situation. A lot of efforts are on but the yields are not up to the mark and in sync with the needs of the market. Capacity building of the skilling ecosystem in a focused manner is the need of the hour. By utilising CSR funds in a planned way, companies can not only boost the Skill India Mission but can also have a huge impact on skilling India and millions of livelihoods by creating a robust workforce for the global market. CSR funds can also contribute towards scaling up skill development initiatives by financially supporting activities across the skill development value chain, capacity building and managerial support. Come and let’s make skill development efforts more inclusive so that the skill divide is minimised. It is time to act now!

The writer is co-founder & MD Orane International, training partner with National Skill Development Corporation, Network Member, India International Skills Centres, an initiative of GoI. Views are personal.

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