Overview
Though fate stands in the way, strenuous effort yields fruit. Labour recompenses what fate denies - Thirukkural 619
Quoting this famous couplet from a hugely popular Tamil literary work, in his India @ 75 presentation in 2007, Professor CK Prahalad defined India’s role as a global power in the year 2022. While this vision document outlines many a goal for India to achieve and among them a very ambitious goal for human development – to have a 500 million strong skilled labour by 2022. Today, fulfilment of this audacious goal is driven by no less than the Indian Prime Minister’s office. The Prime Minister’s National Council on Skills Development is pushing for a skilled India through various government mechanisms as shown in the pie chart below.1
NSDC – A mixed bag of results to date
Among other initiatives, the National Skill Development Corporation’s (NSDC) mission is interesting – since the model assumes little intervention from the government beyond its role as an investment partner to private enterprise and to setup facilitating bodies in the form of sector skills councils. It funds private sector skills training providers to setup centres that can train people for employability in various high labour demand sectors. A quick analysis of its portfolio of investments2 reveals interesting insights.
- On an average NSDC share in total project cost is approximately 70 percent. The total number of training centres of investee companies envisaged is approximately 14000 and the average number of students foreseen per centre per year is approximately 4153
- While the top 4 investments have about 2/3rd of the total committed numbers for skills development (~58 mn), they account for only 43% of the project costs. This is indicative of the benefits of scale accruable to investments in this space3
- NSDC has been investing on creation of capacity on a large scale. The typical ratio of NSDC funding within total project costs is 80 : 20 for the top 4 entities3
- The target for NSDC is to train 0.5 million students per year but its has been able to train only approximately 75,000 students which is 16 percent of the target
- Despite this support for highly scaled models, there is reason to believe, that while NSDC’s smaller investments have been relatively more compliant with their committed targets, large multi sector/ geography players may have significantly underperformed
- In light of the current trends in investment performance, NSDC is likely to significantly tighten its appraisal & monitoring, tread more cautiously on further disbursements and revise estimates to indicate a delay of 2 -3 years to achieve current commitments.
On an average NSDC share in total project cost is approximately 70 percent. The total number of training centres of investee companies envisaged is approximately 14000 and the average number of students foreseen per centre per year is approximately 4153
Indeed, much of NSDC’s initiatives that are currently underway indicate a move toward a more robust evaluation of investments and Sector Skills Councils (SSC) are bodies which will identify current and projected skill gaps in the sectors and develop sector-specific competency.
| Mandate of Sector Skill Councils |
| Research |
| • |
Identify current and projected skill gaps |
| • |
Develop sector specific competency standards and benchmark these with international occupation standards |
| • |
Establish sector specific Labor market information systems. | |
| Quality Assurance |
| • |
Standardize and streamline the affiliation and accreditation process |
| • |
Participate in accreditations and certifications in their sectors. | |
| Delivery |
| • |
Develop and update course modules, and train trainers |
| • |
Partner with educational institutions to train the trainers |
| • |
Partner with educational institutions to train the trainers |
| • |
Promote academies of excellence. |
|
- NSDC has already approved 8 SSCs for the following sectors (i) Automobile Manufacturing (ii) Private Security (iii) Energy (iv) Media, Animation, Gaming, and Films (v) IT and ITeS (vi) Health care (vii) Retail and (viii) Banking and Financial Services. While approval is only the first milestone, actual implementation requires expertise and knowledge that multilateral funding agencies like 3 ADB and World Bank are trying to inculcate, through select SSCs that they have picked up for funding.
KPMG in India point of view
There can be no doubt that the NSDC, the lean organization that it is – has a mammoth task cut out for itself. As it redoubles its efforts to transform the skills training landscape in the country, it will no doubt rope in expertise from international consulting organizations that can bring their global experience in vocational education and skills training to bear fruit in the Indian context. Indeed, it is in overcoming such challenges that opportunities can flourish.
1. NSDC Reports,
2.NSDC Annual Report, year ending March 2011, KPMG in India Analysis
3.NSDC Annual Report, year ending March 2011,