Skill development centres, setup with very high goals, have become hotbed of crony capitalism

skillExcerpts from the report of the Committee for Rationalization & Optimization of the Functioning of the Sector Skill Councils (SSCs), constituted by the Ministry of Skill Development and Entrepreneurship, Government of India:

The Sector Skill Councils (SSCs) started setting up in 2010-11, but they created more confusion and mess than solving the problem. SSCs are industry-led and industry-governed bodies which have been mandated to ensure that skill development efforts being made by all the stake holders are in accordance with the actual needs of the industry. Presently, the National Skill Development Corporation (NSDC) has approved formation of 40 SSCs in different sectors.

SSCs are “of the industry, by the industry, for the industry”, as was told to us by the NSDC in a power point presentation. But, in essence, the way they have been constituted by the NSDC, the SSCs are neither ‘of’ the industry, nor ‘by’ the industry and nor ‘for’ the industry. The involvement of the industry in the SSCs is quite peripheral.

In fact, most of them have been sponsored/promoted by various industry associations which is not the same thing as being promoted by employers. The NSDC document says that 40-50% of the employers of the sector should be members of the SSC. However, there is no evidence to suggest that 40-50% employers are involved in the constitution of the SSCs.

Another important point is that until the 10-20% of the top employers 75 are part of the SSC, it is not going to be effective. Though, some eminent employers are present on the Governing Councils of the SSCs, however, ‘One swallow does not make a summer’. If the SSCs have to be owned by the employers, majority of the members should be part of it.

Another important consideration is that the employers must see value for themselves in coming together. Unfortunately, we have not been able to demonstrate value for them. The SSCs have been created only with a small number of employers; the actual needs of the employers have not been captured; norms and standards developed do not address their needs; the training, assessment and certification don’t meet their exact skill needs and therefore, the so-called skilled persons don’t find placement in their establishments.

The system continues to be supply driven and no wonder that their involvement in the SSCs is peripheral. We have been informed by the SSCs in our consultations that the employers don’t share their skill needs on real time basis with the fear that their business secrets may be leaked out. This argument does not appear to be sound as in many countries, such as Germany, South Korea, etc. this data is freely shared.

The unorganized sector accounts for about 91% of the total workforce in the country. The enterprises in the unorganized sector cover all sectors of economy; they are spread all over the country and their skill needs are different, their productivity is low, quality of products not up to the mark and, therefore, skill development is a dire necessity to improve their quality, productivity and gross value addition.

However, they do not have wherewithals to conduct training. It is, therefore, necessary that the SSCs extend their helping hand in a systematic manner and help them get skilled manpower. There are 15.64 lakh micro, small and medium enterprises employing about 93.01 lakh workers, so, at an average, each MSME employs about 6 workers. SSCs can help them engage at least one apprentice per enterprise.

Though the SSCs were setup with very high goals and ideals, they have turned into hotbed of crony capitalism. It appears that many of them have tried to extract maximum benefit from out of the public funds. It is sad to know that it has all been happening under the nose of National Skill Development Corporation (NSDC). In fact, it will not be an exaggeration to say that the NSDC closed its eyes from these ignonimous happenings.

In many cases, the NSDC itself has promoted them as the governance mechanism of NSDC fosters such functioning. It happened, primarily, because NSDC is hundred percent funded by the government but accountable to its board which consists of majority of private sector industry associations and there has been no strong oversight mechanism created by the Government.

In fact, from the time of its establishment, it was kept away from Parliamentary oversight, audit by Comptroller and Auditor General of India and supervision by Reserve Bank of India. It is using the funds from the Consolidated Funds of India, and should have, therefore, been accountable to Parliamentary oversight and audit by the CAG.

It is non-banking financial company and, therefore, should have been under the supervisory control of RBI. Board members of the NSDC are the representatives of various industry associations and these associations themselves have sponsored/promoted SSCs. Many of these associations and individuals have also doubled up as Vocational Training Providers and assessing bodies in various SSCs.

Power without accountability is a recipe for disaster. In fact, SSCs have become “of the associations, by the associations and for the associations.” All these public funds have been used without serving the two basic objectives of meeting the exact skill needs of the industry and providing employment to youth. The question hence arises is, “had the same thing happened if the funds were contributed by the industry or industry associations.”

The NSDC was required “to establish, manage, run and promote institutes and polytechnics for imparting skills; to play the role of market maker by establishing a price mechanism, correlating and bridging demand-supply asymmetries and creating a viable skill development chain and to perform the role of multiplier organization by engaging with the best and the most innovative onthe-ground practioners from different fields as the sources of both innovation and practice dissemination”. However, it appears that NSDC has failed to discharge its responsibilities and deviated from its original role.

We have observed that there is huge shortage of qualified trainers. One cannot imagine quality training without a quality trainer. The NSDC and SSCs made a mockery of trainers training by giving fresh diploma and engineering graduates 2-5 day training to become a qualified trainer. The instructor training is of one year duration but despite the efforts of the government, the training capacity of the trainers still stands at 8,268 per annum while we require at least 20,000 trainers per annum.

Click HERE to download full report

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