New Delhi, July 7 (IANS): The government Thursday okayed a whopping Rs.1,000 crore employment plan for job-starved Jammu and Kashmir, which has around 500,000 unemployed men and women.

The plan of Special Industry Initiative Scheme in Jammu and Kashmir was approved by the Cabinet Committee on Economic Affairs at its meeting here chaired by Prime Minister Manmohan Singh, according to an official statement.

"It has been launched to enhance the employment opportunities in the state and to formulate a jobs plan involving both the public and private sectors, especially for the youth," the statement said.

The scheme would be launched to provide job-oriented training to some 40,000 graduates, post-graduates and professional degree holders over a period of five years.

With 100 percent assistance from the central government, the plan will be jointly implemented by the National Skill Development Corporation (NSDC) and India's corporate sector. NSDC is a public-private partnership initiative for the development and upgrading of the skills of the growing Indian workforce through training programmes.

The identified private companies will screen and select candidates from the state. After assessing the skill gap of the trainees and the need of the corporate, they will be trained suitably to be absorbed by the private companies.

The company will, in turn, be incentivised to absorb the trainee, the statement said.

The estimated expenditure is approximately Rs. 250,000 per trainee.

"The central government will make a provision of Rs.500 crore in the next five years from 2011-12 onwards. The cost of travel, boarding and lodging and stipend (of trainees) will be borne by the central government," the statement said.

But the training cost will initially be borne by the company which will be reimbursed if the trained youth are given employment.

Some 8,000 youth from the state are proposed to be trained annually.

The plan is based on the recommendations of expert group headed by known economist C. Rangarajan set up by Prime Minister Manmohan Singh in August 2010.

According to rough estimates, there are around 500,000 unemployed youth in Jammu and Kashmir which Chief Minister Omar Abdullah has described as a major challenge for the state.

The chief minister has been maintaining that the problem of unemployment was feeding the two decades of militancy in the state.