To empower youth, the Government has announced three transformative schemes aimed at promoting skilling across various sectors
One of the top nine priorities of the Union Budget is employment and skilling. In line with this, three schemes have been announced to promote skilling. The first scheme involves increasing the maximum loan amount for high-end skilling courses under the revamped Model Skill Loan Scheme from Rs 1.5 lakhs to Rs 7.5 lakhs, with an interest rate of 1.5% per annum. This scheme is expected to empower the youth by providing easy access to advanced-level skill courses, potentially removing significant financial barriers for many deserving students and candidates to gain futuristic and in-demand industry skills, thus creating a future-ready and empowered workforce.Recognising the significant role played by non-banking finance companies (NBFCs) and micro-finance institutions in the skill loan market, the Ministry of Skill Development and Employment (MSDE) has made pivotal modifications to the scheme.
This includes the inclusion of NBFCs, Micro Finance Institutions, and Small Finance Banks to extend loans backed by a guarantee against default up to 75% of the loan disbursed through the instrument of collateral-free loans of up to Rs 7.5 lakh to facilitate 25,000 aspirants every year.Without a vibrant skill loan market, many youths leave aspiring candidates without the necessary financial support to pursue their skill training. To ensure uninterrupted credit flow in the skilling sector and to provide low-income youths with access to affordable finance for specialized skill courses, the MSDE initially launched the Credit Guarantee Fund Scheme for Skill Development in July 2015, resulting in below expectations.