Business Standard, 24 June 2012
Many companies have been funded by the Indian government through the National Skill Development Corporation (NSDC) to develop skilling capacities and impart vocational training to youth.
The question is whether the government should be helping these companies at all — when they can easily find other means of funding. And, alternatively, shouldn’t the government be assisting the students, who may not be able to afford the fees?
NSDC has so far received Rs 4,000 crore as corpus, which it gives to companies as low-interest loans to fund nearly three quarters of their expense in skilling. The companies need to come up with a good business model, which would help them recover the money they have invested.
So, this is not about assisting the needy youth for skill development. But, there is a strong argument on subsidising for the youth or the companies. Today, NSDC is giving loans, and not grants, to companies. What can indeed be given to students is a vocational education loan, which banks are the least enthusiastic about.
The Indian Banks Association last month approved a universal loan scheme for this. However, the member banks are yet to respond.
Meanwhile, states are trying a different approach. The Gujarat Skill Development Corporation — set up by the state government — is conducting two experiments. First, it has decided to give skill vouchers to youth applicants, instead of funding the skilling companies. The scheme, however, has failed to take off so far.
Second, the states are trying to get the companies to use the government college infrastructure, including teaching staff and classrooms, and hence, charge lower fees for their courses. Srinivas Cheedella, president of Laurus Edutech — a company registered under the Gujarat scheme — says the latter has been a success.
Minister of State for Communication Milind Deora is experimenting with providing funds to the beneficiary directly through his NGO (non-government organisation) in Mumbai. He is set to launch a pilot with a Delhi-based NGO, Centre for Civil Society, to see how skilling can be done with funds paid to students.
Recently, Deora wrote to S Ramadorai, skill advisor to the Prime Minister, on considering a reversal in the manner in which skilling funds are used. Meanwhile, NSDC is said to be contemplating a pilot with skill vouchers, a concept that has been recommended in the National Skill Development Policy.
Whether either of these methods help the youth is yet to be known. It is also to be seen if the needy youth can find these skilling centres and vice versa.
NSDC’s effort does not ensure a universal reach and the location of skilling units, too, is not easily identifiable. For instance, all government schools don’t turn into skilling centres by the evening where needy persons can join courses.
Where do migrants in a city go to learn basic communication skills in English/Hindi, which can get them better jobs? The skilling programmes don’t provide any answer.
Karnataka has taken a leaf from Gujarat’s book and turned 300 colleges into skilling units. Institutes such as Laurus Edutech (funded by NSDC), impart education in the state. About 25,000 youth are to be covered in a year. And, the number of government colleges in the scheme is set to increase to 1,000 in two years, says Cheedella, whose institute has a sizeable presence. The state pays the institute on the basis of the number of students it benefits, he says. More states are considering an infrastructure-utilisation model, Cheedella points out.
The target, set by the National Skill Development Policy, is 500 million skilled youth in ten years. Whether these scattered efforts would actually lead to a visible and accessible spread of facilities is yet to be seen.