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Govt mulls tax breaks for cos pooling to build centres for technical training

One of the few tax breaks the government may clear this year

Written by ENS Economic Bureau | New Delhi | Published: July 29, 2013 1:06:10 am

Industries can expect to get tax breaks for pooling resources to build national centres of excellence in technical training. The government is mulling a plan to make the skill management expertise of companies,especially in the manufacturing sector count by allowing them to pool resources,a top level government official told The Indian Express.

The official said this will be one of the few tax breaks that the government may clear despite this being a pre-election year,where tax plans are not tinkered with. But the government wants to create a significant differential in skill building this year and reckons that it can only come if companies are allowed to build institutions that combine the ability of more than one of them.

“One of the initiatives could be that organisations in various sectors come forward and establish at least one iconic national centre for excellence in skill development”,he explained. It would mimic some of the earlier endeavours by private sector companies for higher education like BITS,XLRI and TISS but this time in skill development.

Tax breaks for such institutions are usually given to a sole sponsor foundation,but the government feels this will need to be expanded to include companies too and more than one. The details are being worked out but given the huge pent up demand,the government does not expect any problem in announcing the measure.

The government is also keen that companies tweak their salary structure to encourage existing employees on the shop floor to develop additional skills,while new ones also get differential benefits.

One of the ways this can be done,another government official confided,was by laying down the need for recruiting a minimum percentage of skilled personnel in all employment contracts.

This will create and build upon the demand for skilled employees in the manufacturing sector. Some of these initiatives are expected to be channelled through the newly set up National Skill Development Agency.  

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