In order to address the growing redundancy of low-skilled labour in India due to the advent of automation, national think tank NITI Aayog has proposed that the government set up a labour utilization fund, according to a report by Mint.
The fund will be used to improve the skill set of the country’s workforce and increase its cost competitiveness, thereby encouraging companies to hire more at a time.
In an interview with Moneycontrol, NITI Aayog Vice Chairman Rajiv Kumar said that the government should consider setting up a fund that would be used to train workers.
Kumar said this would encourage businesses to hire manual labour even amid continuously-improving artificial intelligence technology, as well as provide them with social security. He added that the think tank has been working on a blueprint for the government to create jobs. “The objective of our policy should be maximizing employment generation. If you do that, everything will fall in place,” said the NITI Aayog vice chairman.
While explaining the need for such a fund, Kumar said that the focus should be on creating jobs in labour-intensive sectors like housing, construction, exports, garments, tourism, education and health.
“Just like that, we should have a labour utilization fund. It doesn’t have to pay salaries but can be used for better training, for paying provident fund contribution and for covering the health costs. In advanced economies, all these things are provided by the public sector,” he said.
Kumar pointed out the need for a labour subsidy, apart from the capital subsidy that the government is already providing for businesses to upgrade their technologies.