Dear Friends,

I would like to share with you an anecdote of a man I know, who repairs watches. One day a watch came to him for repair during which he noticed a manufacturing defect. He then wrote a letter to the watch manufacturing company based in Switzerland pointing out a defect in the design of their product. As it turned out, the points raised by this man proved to be correct and the company not only appreciated the point raised by the man but also had to withdraw the watches from the market.

What does the example of this man show? It clearly shows that innovation knows no boundaries; that every individual possesses the power to innovate. With perfection in work and work culture, the best of innovations can take place. But, a major component of attaining this perfection is acquiring the relevant skills in whatever we seek to do.

We in Gujarat have made this one of our top priorities. As you are aware, the nation is commemorating the 150th birth anniversary of Swami Vivekananda. Gujarat is celebrating 2012 as the ‘Year of Yuva Shakti’ as a tribute to Swami ji. As a part of the celebrations, we have placed significant focus on enhancing skill development among our youth. Swami Vivekananda himself believed that the future of India depends on its youth. Never before in the history of our nation have we been younger than at present! Today, 72% of our population is below the age of 40, 47% Indians are below the age of 20 whereas only 10% of the global population is under 25. Is this not a great opportunity for us?

Infact, I have always believed that youth power is the answer to the question of whether India or China will lead the world in the 21st century. But, having a massive young population is not enough. There is a need to equip these youngsters with adequate skills and at the same time according proper dignity to each and every skilled profession. Only then will our youth power become our strongest asset.

In order to harness the untapped potential of our youth, our Industrial Training Institutes (ITIs) can play an important role. Over the last decade, Gujarat has made a sincere attempt to improve the scope and infrastructure of our ITIs. Courses that were left unchanged for 3 decades were revised, the number and diversity of courses shot up with state-of-the-art infrastructure. From a mere 275 ITIs in 2001 the number of ITIs has shot up 4 fold to 1054. In the past, we only had 3000 ITI trainers but this has now gone up to 6000. We have also opened a window of opportunity by enabling ITI students to pursue Diploma and Engineering courses after their ITI education, thus widening their career horizons.

Friends, this century will rest on 3 major pillars: IT (Information Technology), BT (Bio Technology) and ET (Environment Technology). Though all 3 pillars are important, special attention needs to be paid to ET. Our ITIs can stimulate stellar research in tapping energy from natural resources such as wind, water, sun etc. Infact, I have even urged solar companies to initiate awards which could serve as incentives to stimulate innovation. Such steps can truly benefit all of us.

Every work, no matter how menial it is deserves adequate dignity. An individual performing a skilled task merits tremendous respect. We want to break away from a tendency of not respecting our skilled workforce. For that, instilling a sense of confidence among our skilled workforce can go a long way and that is why we have become the first state to start soft skill trainings in our ITIs emphasizing on overall personality development. Broadening of our mind is as important as skill development. It is essential to understand the larger vision of our deeds and once this happens no work will seem small. For instance, if a technician is working on solar technology there is a quantum of difference if he considers his work as just another mere job or if he works fully realizing that his efforts can make a difference to generations beyond him. When an expanded vision meets a skilled body, wonders can truly happen!

Gujarat has also launched 20 Swami Vivekananda Superior Technology Centres (STCs). These institutions would provide specialized training using state of the art technology. An example of this would be a STC related to Automobile Servicing. With Gujarat emerging as the auto hub of India, the potential in the auto-servicing sector is immense. Similar centres would cater to CNC (Computer Numerically Controlled) Technology and Solar Technology.

Handing over appointment letters to youngsters

Friends, the results of some of our efforts are already showing. We are hailing this week as Swami Vivekananda Youth Employment Week. In the course of the week, I would be personally handing over appointment letters to 65,000 youngsters. This is a historic recruitment programme in our country. The aspirations of these youngsters are not theirs alone. We remain committed to turning every young mind into a powerhouse of innovation combined with hard work, dedication and motivation. ITIs can become a natural playground in this endeavor, adding to the opportunities for our youth. With strong skill sets, the will to work harder will increase manifold and so will the zeal to perform. It is this mantra of  SKILL + WILL + ZEAL = WIN that will empower Gujarat and enable it to take India to greater heights.


Narendra Modi

My speech while handing over appointment letters to youngsters at Ahmedabad

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Reforms by Conviction and Incentives
June 22, 2021

The Covid-19 pandemic has come with whole new set of challenges to Governments across the world in terms of policy-making. India is no exception. Raising enough resources for public welfare while ensuring sustainability is proving to be one of the biggest challenges.

In this back-drop of financial crunch seen across the world, do you know that Indian states were able to borrow significantly more in 2020-21? It would perhaps pleasantly surprise you that states were able to raise an extra Rs 1.06 lakh crores in 2020-21. This significant increase in availability of resources was made possible by an approach of Centre-State bhagidari. 

When we formulated our economic response to the Covid-19 pandemic, we wanted to ensure that our solutions do not follow a ‘one size fits all’ model. For a federal country of continental dimensions, finding policy instruments at the national level to promote reforms by State Governments is indeed challenging. But, we had faith in the robustness of our federal polity and we moved ahead in the spirit of Centre-State bhagidari. 

In May 2020, as part of the Aatmanirbhar Bharat package, the Government of India announced that State Governments would be allowed enhanced borrowing for 2020-21. An extra 2% of GSDP was allowed, of which 1% was made conditional on the implementation of certain economic reforms. This nudge for reform is rare in Indian public finance. This was a nudge, incentivising the states to adopt progressive policies to avail additional funds. The results of this exercise are not only encouraging but also run contrary to the notion that there are limited takers for sound economic policies.

The four reforms to which additional borrowings were linked (with 0.25% of GDP tied to each one) had two characteristics. Firstly, each of the reforms was linked to improving the Ease of Living to the public and particularly the poor, the vulnerable, and the middle class. Secondly, they also promoted fiscal sustainability.

The first reform under the ‘One Nation One Ration Card’ policy required State Governments to ensure that all ration cards in the State under the National Food Security Act (NFSA) were seeded with the Aadhaar number of all family members and that all Fair Price Shops had Electronic Point of Sale devices. The main benefit from this is that migrant workers can draw their food ration from anywhere in the country. Apart from these benefits to citizens, there is the financial benefit from the elimination of bogus cards & duplicate members. 17 states completed this reform and were granted additional borrowings amounting to Rs. 37,600 crores. 

The second reform, aimed at improving ease of doing business, required states to ensure that renewal of business-related licences under 7 Acts is made automatic, online and non-discretionary on mere payment of fees. Another requirement was implementation of a computerized random inspection system and prior notice of inspection to reduce harassment and corruption under a further 12 Acts. This reform (covering 19 laws) is of particular help to micro and small enterprises, who suffer the most from the burden of the ‘inspector raj'. It also promotes an improved investment climate, greater investment and faster growth. 20 states completed this reform and were allowed additional borrowing of Rs. 39,521 crores. 

The 15th Finance Commission and several academics have emphasised the crucial importance of sound property taxation. The third reform required states to notify floor rates of property tax and of water & sewerage charges, in consonance with stamp duty guideline values for property transactions and current costs respectively, in urban areas. This would enable better quality of services to the urban poor and middle class, support better infrastructure and stimulate growth. Property tax is also progressive in its incidence and thus the poor in urban areas would benefit the most. This reform also benefits municipal staff who often face delay in payment of wages. 11 states completed these reforms and were granted additional borrowing of Rs. 15,957 crores. 

The fourth reform was introduction of Direct Benefit Transfer (DBT) in lieu of free electricity supply to farmers. The requirement was for formulation of a state-wide scheme with actual implementation in one district on a pilot basis by year end. Additional borrowing of 0.15% of GSDP was linked to this. A component was also provided for reduction in technical & commercial losses and another for reducing the gap between revenues and costs (0.05% of GSDP for each). This improves the finances of distribution companies, promotes conservation of water and energy and improves service quality through better financial and technical performance. 13 states implemented at least one component, while 6 states implemented the DBT component. As a result, Rs. 13,201 crore of additional borrowings was permitted. 

Overall, 23 states availed of additional borrowings of Rs. 1.06 lakh crores out of a potential of Rs. 2.14 lakh crores. As a result, the aggregate borrowing permission granted to states for 2020-21 (conditional and unconditional) was 4.5% of the initially estimated GSDP. 

For a large nation with complex challenges as ours, this was a unique experience. We have often seen that for various reasons, schemes and reforms remain un-operational often for years. This was a pleasant departure from the past where the Centre & States came together to roll out public friendly reforms in a short span of time amidst the pandemic. This was made possible due to our approach of Sabka Saath, Sabka Vikas and Sabka Vishwas. Officials who have been working on these reforms suggest that without this incentive of additional funds, enactment of these policies would have taken years. India has seen a model of ‘reforms by stealth and compulsion’. This is a new model of ‘reforms by conviction and incentives’. I am thankful to all the states who took the lead in ushering in these policies amidst tough times for the betterment of their citizens. We shall continue working together for the rapid progress of 130 crore Indians.