The Hindu Business Line : Keyman insurance

This is with reference to "Bringing keyman insurance back to life" (Business Line, June 11). The article rightly points out the asymmetries in taxation not only regarding the keyman insurance scheme but also the other insurance schemes. Indeed, "human skills and intellectual capabilities form the India's real and perceived competence."

And "skills, capabilities, confidence and competence are interrelated and will together play a critical role in the future course of economic development."

I would like to add an observation on this issue. There are several IT companies that advertise in "Job Opportunities," inviting applications from CAs, ICWAs, ACSs and MBAs to join the `ERP stream'. They conduct aptitude tests and select a few for counselling. They say they are willing to offer jobs with better salaries and prospects, along with training, and even allow the candidate to take a bank loan for the cost of training and deduct an amount from the monthly salary towards the loan, which is low initially but may increase later.

They usually ask the candidate to pay about 25 per cent of the cost of training as initial amount. If that is not possible, at least 6.25 per cent is asked for and the company pays the remaining 18.75 per cent, deducting it from the new recruit's salary in first six months. Altogether, the candidate's take-home pay will be less than Rs 1,000 p.m. for the initial six months.

Important things to be considered in this context are: job security; pressure on candidate; treatment during training period; bond with the company throughout the loan period; and IT market in the future.

To overcome the difficulties of both the employer and the employee, why should not the keyman insurance scheme, or something similar, be introduced here? Will it not be a safety measure for the employer and to the employee as well?

My point is that the cost of training should be borne by the employer, and if the employee leaves the job during the `lock-in' period the employer will get compensated.

R. Ananthapadmanabhan

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