New Delhi:
The government has revitalized its skill development efforts, which have been ongoing for nine years under various restrictions.
The skill courses needed for employment in today’s technology-driven era cannot be completed with just Rs 1.5 lakh.
Recognizing the challenges faced by youth from weaker sections and the shortcomings of the existing skill loan scheme, the Ministry of Skill Development and Entrepreneurship has introduced the Model Skill Loan Scheme.
This new scheme increases the loan limit to Rs 7.5 lakh. To encourage banks to provide these loans, the government will guarantee 70 to 75 percent of the loan amount,
helping students afford costly skill development courses and improve their employment prospects.
There were many problems in the first scheme
In the recent budget, Finance Minister Nirmala Sitharaman introduced the Model Skill Loan Scheme.
Just two days later, on Thursday, Skill Development and Entrepreneurship Minister Jayant Chaudhary officially launched the scheme at an event held at Kaushal Bhawan.
Although the skill loan scheme has been in place since 2015, it faced several practical issues.
The maximum loan limit was only Rs 1.5 lakh, and the loan was available only for courses listed in the National Skill Qualification Framework.
Previously, only banks were authorized to distribute loans, which resulted in a total of Rs. 115.75 crore being loaned to just 10,077 youth over nine years.
The scheme has now been revised to increase the loan limit to Rs. 7.5 lakh.
The government will guarantee 75 percent of loans up to Rs. 4 lakh and also on loans ranging from Rs. 4 to 7.5 lakh.
Additionally, Non-Banking Finance Companies (NBFCs) and Small Finance Banks are now included as approved lenders alongside traditional banks.
The restriction of frame work was also broken
The revised scheme has lifted the restrictions of the National Skill Qualification Framework.
Loans will now be available for all courses listed on the Skill India Digital Hub platform of the Ministry of Skill Development and Entrepreneurship.
The government aims to enable youth to pursue new and costly technical courses, including AI and Robotics, to meet future demands.
This expansion is expected to improve their employment prospects.
With the government guaranteeing the loans, banks and NBFCs are more likely to approve them.
During the launch of the scheme, Jayant Chaudhary noted that the previous loan scheme did not fully meet market needs, as many youths could not benefit from it due to its limitations.
He emphasized the importance of overcoming these challenges to achieve positive outcomes.
Secretary Atul Kumar Tiwari highlighted the necessity of this new scheme, as many skill development courses are costly.
He mentioned that the scheme had been under development for one and a half years.
The launch event was attended by AICTE Chairman Prof. TG Sitaram, senior economic advisor Nilambuj Sharan, NSDC Chairman Vedmani Tiwari, and Indian Bank Association Deputy Chief GM Bhagat.
