Officials aware of the matter told ET a formal proposal has been submitted to the finance ministry, and some benefits are expected to be announced in the upcoming Union budget, which will be presented on February 1.
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“It is to create a more integrated pathway that allows companies to invest in skill infrastructure while seamlessly aligning CSR objectives and tax incentives to significantly unlock private sector participation,” said one of the people cited. At present, corporate investments in skilling are governed by multiple provisions across CSR and tax frameworks, each serving a distinct purpose. While CSR spending is treated separately from business expenditure, tax incentives such as Sections 35CCD and 80G are under specific eligibility conditions.
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“Such alignment would not only simplify compliance but also catalyse long-term industry investment in training” the person quoted earlier said.
Opportunity in Global Services
A recent report by Crisil said of the Rs 2.22 lakh crore spent by corporates on CSR since fiscal 2015, only 3.5% has been channelled towards skilling.
Besides, CSR initiatives have been fragmented and focused on conventional or informal trades, disconnected from the global employment ecosystem, it said.
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The ministry of skills development and entrepreneurship feels India has a huge opportunity to cater to the skill needs of developed economies across Europe, Middle East, Japan and Australia, which face acute skill shortage in areas like healthcare, senior care, logistics and construction. However, this would require better policy alignment for the corporate sector to take up skilling in a big way as the government has limited capacity to augment skilling infrastructure and expand reach. Skills training in the country is provided under the flagship scheme, the Pradhan Mantri Kaushal Vikas Yojana 4.0, which extends from 2022 to 2026 and aims to impart skills training to 15 million youth.
As per the Skill India dashboard, so far 2.7 million candidates have been trained out of the total 3.34 million registrations.
The ministry of corporate affairs is already running the PM Internship Scheme, which is partly funded by the Centre and partly by corporates through the CSR funds. The scheme aims to impart one-year internship training to 10 million youth in top 500 companies in five years.