Explore new financing models for skill development: Ficci-KPMG report

A report by FICCI-KPMG titled 'Skill Financing in India,' released on Wednesday, emphasised that over-reliance on government funding has led to suboptimal results in both the quantity and quality of skilled individuals. The report highlighted the urgent need to explore alternative financing models for skill development, suggesting that the government's efforts could be augmented and sustained through partnerships with the private sector.

The study pointed to emerging trends in skill financing such as private equity and venture capital investment, working capital financing for training partners, Public-Private Partnership models, support from international organisations like the World Bank and Asian Development Bank, and crowdfunding platforms as particularly relevant to India's developmental landscape. Such alternative models are deemed essential for maximising available resources, fostering effective collaboration with key stakeholders like corporates and industries, and boosting private sector involvement.

The National Skill Development Corporation (NSDC) has reportedly disbursed Rs 1,400 crore through equity and market debt to enhance skill training capacity, according to the report. This has spurred increased engagement from the private sector, especially concerning training delivery.

However, the report also underscored challenges such as constraints on government budgets, the need for inter-ministerial coordination, and limited private sector participation in funding vocational education. Moreover, it noted that private equity and venture capital investments have been less than encouraging due to issues like limited data availability, liquidity constraints, unclear performance metrics, and the lack of a well-defined exit strategy.