India’s skill mission will shift its focus from the formal to informal sector with an annual expenditure of around ₹5,000 crore, a move that is being seen in sync with government’s tilt towards creating more beneficiaries.

The ministry of skill development and entrepreneurship feels that while there has been an intense focus on the formal sector in the last five years, it left out 93% of the workforce in the informal sector, at least three government officials said.

The ministry, therefore, believes that unless the informal sector is targeted, the skills mission will not be successful, which was also acknowledged at a recent meeting at the Prime Minister’s Office.

“So far, the ministry was focusing on skilling manpower for the 7% of the workforce who are in the formal sector. What about the 93% rest. That’s a big realization for the ministry and all the 22 departments of the Union government who have some skilling agenda. All 22 departments will gradually shift their focus to informal and unorganized sector,” said one of the three government officials cited above requesting anonymity.

The second official said a handful of ministries led by the skills ministry and the ministry for rural development can collectively spend ₹ 4,000 crore a year for skill training manpower for the informal sector and with the government departments pooling in, the total spending can touch around ₹5,000 crore to help small organizations improve, get better manpower or train their existing workforce to enhance their productivity. “Our estimate shows that at least 80% of the labour market is working in establishments having less than six employees. The skills ministry is working on some pilots to effectively implement it across the country,” the official said.

When asked about the change in focus of the skills mission, K.P. Krishnan, skill and entrepreneurship secretary said: “The skills ministry is in sync with central government policy focus of including the un-included. You will see our ministry doing a lot more for the informal-unorganized sector.”

Authorities said the Centre will partner states especially at the municipality and block level to reach the target audience. “From a motor garage to a hotel, from tourist resorts to small printing press, all need skilled people. They have more capacity and ability to grow as micro entrepreneurs, thus drive employment generation in the grass root level. Mudra loan is a success because it targets the right audience. Hence for skill mission such a move will be rewarding,” the second official said.

The first official, however, said states will have to play a pro-active role and the Centre will have to convince them that such a shift will benefit most of the people at the grass root level.