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Skill India Programme

The National Skill Development Corporation (NSDC) is one of the Public Private Partnership associations in India. The aim of this corporation is to promote the development of skill by catalysing quality, for profit vocational and creation of large institutions.

Funding to build the scalable and initiatives for-profit vocational training is provided by NSDC. Its aim is to enable the support systems also like train the trainers in academics either through partnerships or directly, information systems and quality assurance. NSDC acts like a catalyst in the development of skill by providing funds to enterprises, organisations and companies that provides skill training. NSDC also develops appropriate models in order to enhance, coordinate and support private sector initiative. Under the purview of NSDC, the differentiated focus kept for 21 sectors and its understanding about its viability would make each and every sector much attractive to the private investment.

Vision

NSDC came as the national skill development mission’s part to fulfil India’s growing needs for the skilled manpower available across sectors along with narrowing the existing gaps between supply and demand of skills. National Skill Development Corporation’s (NSDC) formation was announced by the Union Finance Minister in his speech of budget (2008-09): he spoke that there is an urgent need to launch world-class development programme for skill in a mode of mission that would address the imparting challenge of skills that are required for a growing economy. The leadership and the structure both of the mission should be in a way that the mission of the programme can get scaled up quickly in order to cover the entire country.

Mission

  1. Upgrade the skills through important industry involvement to the international standards and also develop the frameworks necessary for quality assurance, curriculum and standards.
  2. Coordinate, support and enhance the initiatives of private sector through appropriate models of Public-Private Partnership (PPP) and strive for important financial and operational involvement from the private sector for the development of skill.
  3. Prioritize initiatives having catalytic or multiplier effect to the one-off impact.
  4. Play ‘market-maker’ role by bringing finance in those sectors particularly where the market mechanisms are missing or ineffective.

Objective

To significantly contribute (30%) to the complete up skilling/ skilling target of 500 million people by 2022 in India, by fostering the initiatives of private sector mainly in the programmes of skill development and to also provide funding.

Structure

NSDC is a company of not-for-profit that the Ministry of Finance had set up under Companies Act section 25. It is having Rs. 10 crore’s equity base of which 49% are with the Indian Government and the remaining 51% are with the private sector.

NSDC requires governance model and structure to ensure good decision-making that will provide it with continuity, stature and autonomy. Thus, there is a kind of tiered structure of decision-making in the organisation that comprises of:

  1. Executive Council
  2. Board Sub Committees
  3. The Board of Directors
  4. National Skill Development Fund (NSDF)

There is a very clear-cut role in the strategy, activities and operations of NSDC to facilitate the mandate of stimulating and coordinating the programmes of skill development of private sector or the organisation with enhanced effectiveness and flexibility.

Role

The NSDC catalyses and facilitates initiatives that could potentially contain a multiplier effect like an actual operator operating in the space. While doing this, it strives the involvement of the industry in the skill development aspects.

This approach is to aim development of partnerships with several stakeholders and then build on the current efforts instead of undertaking several initiatives directly or by duplicating the efforts underway currently. The NSDC strives the following efforts in order to scale up and achieve the up-skilling/ skilling objective of 150 million people:

  1. Building a strong corpus
  2. Create a leverage for it
  3. Ensure the funds are “re-circulating” largely, i.e. equity or loan instead of grant
  4. Develop innovative, high-quality and low cost models

Keeping all this in mind, 3 key roles are played by NSDC:

  1. Incentivising and funding: This is the key role in clear terms. It involves giving financial facilities either as equity or loans, supporting financial incentives and providing grants to select the initiatives of private sector to improve the viability of finance in the form of tax breaks etc. Funding’s exact nature (i.e. grant, loan and equity) would depend on attractiveness or viability of the segment to the player type to certain extent (non-profit NGO, for-profit private or non-profit industry association). NSDC over the time aspires creation of strong viable models of business and reduce the role of grant-making.
  2. Enabling support services: An institute of skill development requires some support devices or inputs like training, faculty, curriculum, quality assurance, standards, student placement mechanisms and technology platforms etc. A significant enabling role is played by NSDC in some of the support devices and setting up accreditation systems and standards with the industry association systems in partnership most importantly.
  3. Shaping/creating: NSDC in near-term will proactively provide and seed momentum for the large-scale participation in the development of skill by private players. NSDC will also attract potential private stakeholders, identify critical groups of skill, develop skill development models and provide them support of the efforts.

Skill Development

The up-skilling/ skilling challenge by 2022 of 150 million people requires significant supplementary development of skill enhancement and fundamental reform of education across higher, secondary and primary education. Primarily NSDC has a focus on supplementary development of skill and strive the creation of seamless tracks of education system.

Foster private sector initiatives

In order to strengthen supplementary development of skill, NSDC has a focus to foster the private sectors efforts that includes both for-profit and non-profit initiatives with building models’ goal that are even scalable.

A differentiated approach is adopted by NSDC to support the initiatives of private sector depending upon the target segment. There are 3 segments that are focused by NSDC based on skill group’s marketability and student population’s income level and are as follows:

  1. Attractive segment: The NSDC plays only a reactive role given that automatically the market works and it supports the scale up as well by several players.
  2. Viable segment but involving uncertainty/high risk or with marginal economics: This is NSDC’s key area that is focuses in near-term, having an aim of being able to make the segment more attractive for the private investment.
  3. Completely unviable segment: NSDC, over the time will aspire in order to work in the segment with the collaboration with the Government department thereby helping to develop the model of innovative business that can help to move the players to viable segment from the segment.


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