Skilling failure: Govt must streamline delivery models for better outcomes

With the launch of the Skill India Mission, NSDC became nodal implementing agency for myriad skills under this umbrella, a function that demands a significantly different set of managerial abilities

The crisis in National Skill Development Corporation (NSDC), which has been festering for almost a year, underlines the risks of launching a private-public partnership (PPP) institution with a diffuse role and inadequate oversight. In May this year, the chief executive officer was removed. The exit followed allegations of financial irregularities and other complaints. Reports point to lack of due diligence in the disbursement and recovery of loans — including lending to non-existent training centres or to habitual defaulters. These controversies could not have been more ill-timed, given the urgent need to bridge the huge skill gap in the Indian workforce, which is a perpetual complaint of India Inc.

 

In itself, the idea of NSDC was unexceptionable. Set up in 2008 as a not-for-profit in PPP mode with the government holding 51 per cent and a slew of associations representing the private sector — Nasscom, the Confederation of Indian Industry, and Federation of Indian Chambers of Commerce & Industry — accounting for the remaining 49 per cent. Its initial mandate was to act as a financial body providing funds for training institutes that ran skill-development programmes. PPP was a concept in vogue at the time. Private-sector participation was designed mainly to ensure some level of job placement for those trained under NSDC’s auspices. It is fair to say that despite being overseen by a series of stalwarts from the private sector, NSDC recorded a modest success, a result perhaps of the misalignment between government and private-sector processes and the fact that growth in the job market, too, was limited.  By 2015, however, the expansion of its mandate added new challenges.

 

With the launch of the Skill India Mission, NSDC became the nodal implementing agency for the myriad skills under this umbrella, a function that demands a significantly different set of managerial abilities. There are four main schemes under the Skill India Mission, covering a large number of institutions. There is, for instance, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) for upskilling and reskilling, covering over 2,500 centres, and the National Apprenticeship Promotion Scheme, which partly underwrites basic training costs for employers involving over 49,000 of them. There are other schemes such as the Craftsmen Training Scheme, instituted through industrial training institutes. An overseas arm also places workers in foreign jurisdictions, as was recently done in the case of construction workers for Israel.

 

For a non-profit of roughly 200 people, this is a vast ambit of responsibility, especially given that each scheme demands deep levels of oversight for institutions spanning a country as vast as India. No surprise, NSDC’s placement record has been patchy with widespread complaints about the quality of training. Given the gravity of the issue, a thoroughgoing reorganisation of the skill development-delivery architecture is called for, including a reassessment of NSDC’s role. A more robust PPP model may be the National Apprenticeship Promotion Scheme, which works on promoting on-the-job training for workers in private enterprises. As NSDC illustrates, directly involving the private sector in government functioning has rarely met with game-changing successes in India.