Strategy for Skill Development : Government Perspective4th Global Skills Summit

15 September 2011 New Delhi

Dilip Chenoy, MD & CEO, NSDC

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The Indian skills landscape and the journey so far

The way forward

Agenda

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The National Skills Policy broadly defined 4 major areas for India to achieve its target for 2022

• Does not discriminate between private or public delivery and places importance on outcomes, users choice and competition among training providers and their accountability.

Policy coordination

and coherence

• Support the supply of trained workers who are adjustable dynamically to the changing demands of employment and technologies.

• Promote excellence and will meet the requirements of knowledge economy.

• Support employment generation, economic growth and social development processes

• A framework for better coordination among various Ministries, States, industry and other stakeholders will be established.

Harness inclusivity and reduce divisions such as

• male/female; rural/urban• organized/unorganized

employment• traditional/contemporary

workplace

Choice,competition and accountability

High inclusivity

Dynamic and demand-based

system planning

India needs to create 500

million skilled workers by 2022

Enhanced Role of private sector critical to success

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The current landscape needs drastic capacity addition to meet future demand

Privately owned ITCs

*Includes ministry of housing and urban poverty alleviation, textile, health and family welfare, food processing industries, and others**Assuming that the existing workforce in the age group of 45-59 will not be re-skilled***Assuming training fee of Rs 2000 per student for the total demand estimated

Source: 11th five year plan; NCEUS report; McKinsey analysis

Current capacity in skill development under various schemes, 2008-09

Eight-fold increase in capacity is required to meet aspiration

1.8

0.8

Total capacity inskill development 4.3+

Other privatetraining providers

XX

Other ministries* 0.3

MSME 0.2

Ministry of rural development

0.2

Ministry of agriculture 0.2

Ministry of women &child development

0.2

MHRD

MLE 1.30.5

Total demand by 2022 526

Reduction due toageing/ retirement**

80

Reskilling / upskillingof 90% of existingworkforce (460 million)

414

Addition to workforce@ 12.8 million per year

192

Total supply by 2022 @ current capacity

65+

8x

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Skill development has received a major policy thrust

Strengthen existing infrastructure

• Revamping ITIs

– Conversion of 500 ITIs into centre of excellence (with assistance from World Bank)

– Upgradation of remaining 1396 ITIs through PPP mode

• Upgradation of 400 government polytechnics

• Computerization and networking of all 969 Employment Exchanges Centers, charging them with broader mandate of providing vocational guidance and creation of national web portal

Capacity addiction

• Addition of 1500 new ITIs in PPP mode in underserved regions and industrial clusters/SEZ

• Addition of 125 new polytechnics in PPP mode in hitherto underserved districts

• Establishment of 50,000 Skill Development Centres to reach the rural populations

• Expansion of vocational education from 9,500 senior secondary schools to 20,000 schools, increasing capacity 1.0 million to 2.5 million

Fund the unviable segments

• Skill Development Initiative of DGET to target the informal sector by introducing demand driven short term training courses based on Modular Employable Skills (MES)

– Reimbursement of Rs. 15 per hour per trainee to training providers, total budget of 550 crore for skilling 1 million people

• Following institutional arrangements have been made

– National Council on Skill Development (NCSD): apex body to give policy directions

– National Skill Development Coordination Board (NSCB): to harmonize government initiatives

– National Skill Development Corporation (NSDC): to foster private sector participation

Skill Development Mission

ILLUSTRATIVE

SOURCE: McKinsey study, National Policy on Skill Development

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Prime Minister’s National Council for Skill Development

National Skill Development Co-ordination Board

Government Initiatives

17 Central Ministries

Private sector initiatives

NSDC created as a part of the government’s co-ordinated action in the skills space

NSDC structure

NSDC is a Public Private Partnership created by the Ministry

of Finance•51% stake by industry

•49% stake by GOI

Initial funding of ~ INR 1000 cr received from the GOI and parked with the NSDF for use of NSDC;

additionally Rs 500Cr committed in budget for 2011-12

Target skilling / up skilling 150 million people by 2022 by

fostering private sector participation

Advisor to PM on skills

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Estimated skill gap of 240Mn across 21 key sectors

Source:IMacs Study

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NSDC in a PPP mode has funded a diverse portfolio of 33 companies; in addition 6 Sector Skills Councils

Training providers

In the education business

In unrelated businesses

Start upsLarge established corporates

TechnableGOLS

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Funding proposals approved by NSDC Board As of 25 August 2011

Number of proposals approved Training organisations Sector skills councils

Financial commitment

Per annum training capacity created at full scale

Number of people to be trained over 10 years through 33 projects

39

33

6

Rs 1022 Cr

113 Lakhs

570 Lakhs

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30 SSCs at various stages of Formation30 SSCs at various stages of Formation

Current status of SSC proposals

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FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 TotalTotal Proposals per year to be Funded (nos.) 25 32 44 52 60 65 62 50 42 31 23 14 500

Small ticket proposal 6 11 16 21 24 25 22 18 15 11 9 6 184Medium ticket proposal 16 18 24 27 32 35 34 28 24 18 12 7 275

Big ticket proposal 3 3 4 4 4 5 6 4 3 2 2 1 41Total Trainee Output per year (nos. lakh)* 1.2 6.1 15.7 33.4 60.2 97.9 146.1 203.9 266.4 331.8 395.1 454.2 2011.9

Snapshot of 10 year NSDC Targets : The Skill 500

* These are achieved after a lag of a year

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In addition knowledge base being created

• Sector skills gap reports met with huge acceptance from multiple stakeholders

• Studies initiated for skills gap in the Infrastructure sector

• Pilot for district wise skill gaps being initiated with IAMR

• State skill gap study being initiated for Orissa and NE

• Study on Train the Trainer being initiated with MART

• Study on Financing Mechanisms for Vocational Loans being done with ISB

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Attempts to create an “enabling” environment - skill loan being introduced with Central Bank of India

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Current Status of SSCs by Industry Sectors

32 SSCs at various stages of Formation32 SSCs at various stages of Formation

67

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Agenda

The way forward

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The skills industry however facing challenges in the environment in which it operates

Reward for trained manpowerCompensation for trained resources

AwarenessBrand for vocational training – social stigmaQuality and growth prospects

Non availability of good quality trainers

Salary structures

Ability to payWillingness to payConversion from push to pull model

Industry interface

Making vocational skills aspirational

Quality and availability of trainers

Student Mobilization

KEY CHALLENGES

POLICY

POLICY

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Challenge 1 : PolicyIs there an overlap in roles?

• Developing NVEQF

HRD Ministry

Setting standards AccreditationRunning institutes

FundingEmploymentutilities

• Upgrade Employment Exchanges*, integrating them into a LMIS

Ministry of Labour

• Mandate to develop NVQF given to NCVT

• Set up framework for affiliation and accreditation of institutions

• Frame policy decision on ITIs/ITCs

• Skill development initiative to fund courses in modular employable skills (MES)

State governments

• Operation of ITIs and various schemes

• Support training providers by sha-ring infrastructure

Other central ministries

• Each ministry having training programs for its own sector**

• Various sector specific initiatives by ministries***

• Set up SSCs to develop standards and skills inventory

• Establish sector-specific LMIS at national & state level

NSDC / SSCs • Standardize affiliation and accreditation process through SSCs

• Fund proposals with viability gaps

Govt./semi-govt. entities

• Vocational Schools

• PPP programmes

• CBSE, AICTE affiliation

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Challenge 1 : PolicyIs there a common direction and approach on skill building?

• Grant models vs sustainability

• Industry recognition vs government certification

• Short term vs long term vision and plans

• Integration with UIDAI

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Challenge 2 : Making VT aspirational / Student Mobilization Learnings from NSDC partners meet

Key challenges

Best Practice/ solution to deal

with the challenges

• Skills means “Blue Collar” – low aspirations• Convert from “push” to “pull”• Demand supply mismatch• Cost of mobilization• Commensurate compensation

• Demand led approach• Use of local opinion leaders and influencers• Spend time on counseling – it is time well spent• Skill mapping and profiling• Availability of finance• Campaign to make VT aspirational

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Making skills aspirational – integral to developing the eco system

World Skills competition

1

National campaign to make skills aspirational

2

Business Plan competition focused on skill development

3

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Challenge 3: Industry InterfaceLearnings from NSDC partners meet

Key challenges

Best Practice/ solution to deal

with the challenges

• Quality placement, underemployment• Industry not getting what it needs• Industry not willing to pay higher salaries for trained resources

• Sector Skills Councils• Involve industry through training life cycle• Soft skills an integral part of training program• Internship models

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Challenge 4 : Availability of TrainersLearnings from NSDC partners meet

Key challenges

Best Practice/ solution to deal

with the challenges

• Compensation structure• Skilling for trainers• Variation in quality• Availability in rural / semi urban areas

• Incentive and referral schemes• Link performance to placements• Define career path• Technology interventions• Involve industry

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Onus now on industry on multiple frontsExtract from National Skills Policy

1. Owning Skill Development activities

2. Identification of competencies and setting up of competency standards, skill demand

analysis and curriculum development

3. Facilitating training of trainers

4. Delivery of training, monitoring and evaluation

5. Participation in examination and certification

6. Participation in affiliation and accreditation process

7. Sharing of work place experience, machinery and equipment

8. Support by way of physical, financial and human resources

9. Facilitating employment of trained graduates

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Thank you

dilip.chenoy@nsdcindia.org