NSDC … A complete failure

The Sharada committee, on functioning of sector skill councils (SSC) and constituted by the ministry of skill development, states this in no uncertain terms. 

I couldn’t agree more. The entire skills ecosystem is in a bloody mess.

As someone who has been connected very closely with the emerging skills ecosystem in India since 2010, I must say that the committee has been accurate in its findings. Earlier too the CAG audit report had scathing observations to make which resulted in the both Dilip and Atul (MD and COO resp of NSDC) quitting their jobs in 2015.

SSC’s which are central to structured skilling and quality are completely off-track

NSDC has set-up 40 sector skill councils (you read it right … FORTY) with a few more to come shortly. What the rationale was, behind creation of such a large number of SSC’s is difficult to fathom. ILO has an International Standard Classification of Occupations (ISCO-08 standards), Based on which most countries have classified job role groups, sub-groups and further sub-classifications. The International Standard Industrial activities(ISIC) lists out 21 major activities covering all economic activity. India’s official classification (based on the ISIC) the NIC 2008 lists out 19 such activities.

Against this background, the basis for creation of so many SSC’s, remains a mystery. It shows either a complete lack of understanding… or was there a different purpose? One doesn’t know.

If you look at the skills ecosystem, it is the SSC’s that are central to it. They are required to liaise with their sector representatives across the spectrum (large and the MSME, organized and the unorganized), identify demand (dynamic), create standards for each job role, and ensure quality through a robust accreditation/affiliation mechanism for training centres, assessment and certification.

If such a key element of the entire ecosystem (perhaps the single most important) is handled casually and in an ad-hoc manner, then it is a clear recipe for disaster. The report mentions that no serious thinking was applied during formation of SSC’s, and that it has been populated with people closely associated with NSDC and hijacked by trade bodies such as CII, FICCI who incidentally are also part of NSDC board. I would go on to add that, in fact early NSDC choices for senior positions, themselves were flawed what with people from trade bodies (SIAM), banks and such unrelated areas and who have no knowledge of the skills ecosystem, occupying top management positions.

That training quality is bad is public knowledge, but even the numbers are suspect

A quick check at NSDC training numbers (on the SDMS) would throw a disturbing pattern. Massive number of trainees are typically shown as skilled or registered in the last quarter every year. A closer look will reveal that most of these were those which had skill training ranging from a few hours to, at best a few days. Did these training programs actually happen? Even if they did, was it in any way meaningful? Clearly NSDC as also its partner organizations have a lot to answer.

NSDC did nothing about this disturbing pattern. Far from it, they tacitly facilitated it.

It is public knowledge that most of training numbers for the STAR 1 program (launched just preceding the 2014 general elections with undue haste, to enable cash transfer to a sizeable section of the youth population) were fraudulent. No training was done in most instances. The stakeholders – the training providers, the trainees, the campus or the venue providers, the assessment agencies and the freelancer assessors – split the spoils among themselves.

NSDC remained a silent spectator to this collective looting and in fact proudly published the STAR 1 training numbers proclaiming it as a significant achievement of sorts.

All the spending through NSDC has brought negligible progress in the skilling front

If we add up the total amount of public money invested in NSDC or its affiliates via NSDC and add projects implemented by NSDC (like STAR and PMKVY), we seem to have sunk about INR 7000-8000 cr with no meaningful progress to show. NSDC’s website proclaims 1.15 million trainees, and 9000+ training centres. A very basic audit will reveal that most of these numbers are grossly incorrect and overstated. In so far as placement is concerned the official numbers themselves are absolutely pathetic, around 12%. These are those who would have anyway got the job irrespective of training or lack of it.

What then do we actually have in return for this massive public spend. Nearly nothing.

Training partners are bleeding and most are defaulting in repayments

Most of NSDC’s training partners are today facing a financial disaster. Nearly all of them are defaulting on their repayments. What is more significant is that many of these partners have not created any worthwhile physical infrastructure, nor has any knowledge asset been created. The available content is mostly junk and training infrastructure is limited to investment in furniture and basic teaching aids usually in rented premises. In one instance known to me, even such miscellaneous assets are unavailable, despite an investment of about INR 24Cr. About 70% of the nearly one lakh trainees claimed by the particular partner are in some generic soft skills for a few hours. 

Today, without an exception every single training partner is dependent on government funded skilling programs to sustain or survive. A terribly sad state of affairs indeed.

Summing up, the money loaned is almost as good as lost in most instances. Whats more these outfits continue to guzzle public funds by way of other government funded training programs, like the DDUGKY, NULM and so on. The training provided is substandard, placement is pathetic and it is simply more money going down the drain.

The principal responsibility for this mess again lies with NSDC.

The present government is seized of the problem but action must be drastic and swift

The present government woke up to these flaws and has been making the right moves. The ministry of skill development and entrepreneurship as an independent ministry was set up in 2015. The PM launched the skill India initiative with usual fanfare now associated with this government. What however is extremely important is swift and drastic corrective action. This government (as also the previous government) clearly understands the significance and importance of skilling. The intent to put it on the right track is also there. For some reason the action is restrained. The micro changes at the ground level do not seem to reflect urgency. The government must act on the recommendations of this report, which in summary is

1.      To limit NSDC’s role to that of an NBFC facilitating financing training, including various other skill training projects of other ministries. Recover / write off old loans immediately.

2.      To strengthen NSDA, and make it the regulatory body for the industry

3.      To dismantle current SSC’s and to set up afresh a new set of Skill councils (they have been listed in the report in detail). A kind of a rejig with some very rational grouping of SSC’s.

4.      To ensure SSC’s primary function is Labour market Information System (LMIS) and continual liaising with all segments of the sector.

(The committee report runs over 500 pages and is in 3 parts. Those of you who wish to read it fully, may download the report from the MSDE website. I have presented to the ministry a very detailed feedback on this report officially. If you want to know about the contents of the report and my detailed feedback, I will be happy to share with you. Please mail your request to me at [email protected] or text me at +91-9899882530 / 9110387599. Genuine scholars, organizations and serious individuals may feel free to contact me regarding any clarifications on ISCO-08, ISIC or NIC-2008 or other standards and quality aspects of skilling. I shall try and revert on any queries within 2-3 working days)