0. India Australia Partnerships
For Private Circulation only
Ensuring Sustainable Offshore Delivery : India’s Skills Development Model :
Opportunities for
India Australia Partnerships
25th July Melbourne, Australia
Thank you for NSDC an opportunity to present various engagement opportunities for Australia in India in vocational education training. In last one and half years, there has been many exchanges between the two countries, sharing best practices and experiences in capacity building, training of trainers, curriculum development and many more. Both nations has benefitted from the same.
Dilip Chenoy
CEO & MD

1. Agenda Overview Government Initiatives in Skill Development in India
NSDC Model: Encouraging Public Private Partnerships
Areas of Collaborations and Key Recommendations
With this presentation, I would like to first give a brief overview of the current skill development need and initiatives in India. Then I would like to explain the NSDC model, a one of its kind of PPP between the Government of India and Industry. Towards the end, I would be briefing about the current collaborations between India and Australia and future possibilities.

2. India: Land of World’s Largest Young Population
1991
Age
2001
2011
2021
70% of the population will be in working age group by 2021
Home to the second largest population in the world, a report from Goldman Sachs predicts that India would become the third largest economy in the world by 2035, just behind the United States and China.
The country clearly has a large pool of young English speaking people and has the potential to meet the skill needs of other countries apart from its own domestic demand.
Where the Population of rest of the world is relatively old, India has a great opportunity to harvest its ‘Demographic Dividend’
Government’s policy to ensure that working population are skilled to meet requirements of the industries.

3. However, plagued by inadequately skilled manpower
High drop outs in the education space 1
In service training levels very low in India 4
Very low enrolments for VET 3
Skilling should
Become a major
Policy Focus
going forward
Employability of the skilled a challenge 2
Only one in four engineering graduates in India is employable, based on their technical skills,
English fluency, teamwork and presentation
skills and of the 4 lakh odd engineering
graduates, who graduate each year, only about
20% is good enough for India Inc.
- NASSCOM
Still, the country suffers from Huge skill gap. The country suffers from extremely high school drop out rate, close to 56.8% and one of the lowest GER in the world.
Apart from this, the VET enrollment is extremely low in comparison to other major economies of the world.
The country today faces dual challenge, first to include the school drop outs in the mainstream by providing them quality vocational training for gainful employment and to improve the current curriculum followed in the higher education, which needs to be based as per industrial requirements so that India doesn’t have a huge problem of ‘Educated’ unemployed youth.

4. Incremental requirement Incremental requirement
Industry requires 347 million skilled manpower over 10 years for sustaining it’s growth
Industry
Incremental requirement
(in million)
Building and Construction Industry
33.0
Infrastructure Sector
103.02
Real Estate Services
14.0
Gems and Jewellery
4.6
Leather and Leather Goods
Organised Retail
17.3
Textiles and Clothing
26.2
Electronics and IT Hardware
3.3
Auto and Auto Components
35.0
IT and ITES
5.3
Banking, Financial Services, and Insurance
4.2
Furniture and Furnishings
3.4
Industry
Incremental requirement
(in million)
Tourism and Hospitality services
3.6
Construction Material and Building Hardware
1.4
Chemicals and Pharmaceuticals
1.9
Food Processing
9.3
Healthcare
12.7
Transportation and Logistics
17.7
Media and Entertainment
3.0
Education and Skill Development Services
5.8
Select informal employment sectors (domestic help, beauticians, security guards)
37.6
Incremental
347
Going forward it is estimated that the 20 high growth sectors would face a skill shortage of 347 million persons.
Source: IMaCS analysis

5. Policy coordination and coherence million skilled workers by 2022
The National Skills Policy 2009 targets skilling 500 million people through 4 pronged approach
No discrimination between private or public delivery
Importance on outcomes, users choice
Competition among training providers
Policy coordination and coherence
Promote excellence
Meet the requirements of knowledge economy.
A framework for better coordination among various Ministries, States, industry and other stakeholders
Approach adequately communicated and implemented
male/female
rural/urban
organized/unorganized employment
traditional/contemporary workplace
Choice,
competition
and accountability
High inclusivity
Dynamic & demand-
based system planning
India needs to create 500
million skilled workers by 2022
Realizing the above mentioned challenges, the GOI envisaged to skill 500 million people by 2022 by increasing the then annual training capacity of 3.5 million per annum to 15 million.
The National Skills Policy was thus formed in March 2009, laying a comprehensive strategy for skill development initiatives for the Country to increase capacity and capability of skill development programs.

6. New approach to addressing the gap
Social Appreciation of Skills As a Livelihood Asset
Linking Education to Employability in the Global Knowledge Economy.
No One Solution. Every Region demands an innovative approach.
Undertake fundamental reforms across the education system (primary, secondary and higher) to
improve overall quality / outcomes,
increase retention and
ensure seamless integration with vocational training
Significantly enhance Government-driven vocational training efforts
Increase scale of PPP initiatives to better utilize Government infrastructure
4. Foster Private sector / Industry participation in skill development

7. Government’s Co-ordinated Action in Skills Space
A action plan was formed giving structure of the already existing initiatives and focusing on coordination between various ministries.
To foster private sector participation in skill development, NSDC, a first of its kind- unique PPP between the GOI and Industry was formed, with the target of skilling 150 million people by 2022 by funding skill development projects.
Multilateral , bilateral and private sector funding to NSDF

8. Why the “ New” Partnership Model
For identifying the competencies and setting up standards as per Industry requirements
For delivery of training, monitoring and evaluation
For participation in examination and certification
For participation in affiliation and accreditation process
For facilitating training of trainers
For facilitating employment of trained persons
Skill demand analysis and curriculum development
Sharing of work place experience, machinery and equipment
Support by way of physical, financial and human resources
The Industry participation in skill development in India is now seen as extremely crucial for increasing by capacity and quality of the VET.

9. Agenda Overview Government Initiatives in Skill Development in India
NSDC Model: Encouraging Public Private Partnerships
Areas of Collaborations and Key Recommendations

10. Key elements of NSDC’s underlying philosophy
NSDC – a unique model created with a well thought through underlying philosophy
Key elements of NSDC’s underlying philosophy 1
Create: Proactively catalyze creation of large, quality vocational training institutions
Fund: Reduce risk by providing patient capital
Improve returns by providing viability gap funding
Enable: Support systems required for skill development
Sector skill councils
Quality Assurance
Information system
Train-the-trainer
Set Standards 2 3

11. Create : Inviting Private Sector to Make it Sustainable and Scalable
Response to Demand
Develop a strategy
Create a knowledge base
Excite entrepreneurs by bringing out the opportunity
Go beyond the training, address issues of the ecosystem
Develop partnerships, move beyond a pure funding relationship
Focus on outcomes
Share the risk
Provide patient capital
Develop non intrusive robust monitoring programmes
Trust and transparency in the system
Eco system to support the organization
Attracting Industry players: Start ups, Social Entrepreneurs, NGOs, Medium Size Training Organizations and Large Corporates into Skill Development.

12. Driving vocational training business models by providing patient capital
Elements
Description
Who gets funded?
Any organization with scalable, sustainable business model that ensures employability of the resources trained
Including start ups
Including Indian partnership with Australian Companies
What is the
amount of funding?
~Upto 75% of the project cost
What is the form
of funding ?
Debt at subsidized rates ; other features like moratorium built in depending upon nature of project
Equity
Grant funding (only in very select cases)
Is there
special focus?
NSDC is looking to fund businesses that seek to create employable people across all sections of the society

13. Robust process designed to ensure rapid turnaround in the process
Board
Representatives of key stakeholders – both government and private sector
Active involvement of Government, Industry Leaders and leaders from Social Sector for approving projects, ensuring interest of all stakeholders.
Proposal Approval Committee (PAC)
Diverse representation from the Government, private equity, NGOs, industry
Proposal Evaluation Committee (PEC)
Due diligence partners
NSDC team
Proposal Introduction and evaluation – test of responsiveness, technical, financial and legal due diligence
Turnaround of < =3 months targeted for proposals

14. Total Ten Year projections
Private partners from Industry, NGOs, Start Ups form NSDC Portfolio
Training providers
In the education business
In unrelated businesses
Start ups
Large established corporates
Technable
GOLS
Total Ten Year projections
of 67 Million

15. Some early signs of success…
Parameters
As of June 2010
As of 31March 2011
As of June 2012
Total Number of Partners' Approved
 65
Training Partners 3 25 52
Sector Skill Councils 13
Total Active Partners 12 28
Total number of Centres -
82+484* *
Number of People Trained
20,482
212,664
Number of People Placed
789
165,896
Cumulative Placement Achieved
70.1%
78%
Total Funds Committed (in US $)
$8.2 mn
$120 mn
$254mn
Total Sectors Covered 6 15 23
Note: *Pratham’s EFE centers.

16. Financing for vocational training National Qualification Framework
Multiple initiatives being taken by NSDC to develop the skills ecosystem, (I) 1 2 3 4
Sector skill councils
Knowledge Base
Financing for vocational training
National Qualification Framework
11 SSCs approved by NSDC
9 proposals getting evaluated; pipeline of about 10 proposals
Slow but sure interest by industry
District wise skill gap studies undertaken for the 8 NE states, Odhisa, Bihar, AP, Bihar, MP, Rajasthan, West Bengal and Karnataka
In addition to 20 high priority sectors, sectors skill gap studies for infrastructure and sports sector
A study on train the trainers conducted
Vocational Loan on a Pilot basis
Loan would in the range of Rs.5000/- to Rs.1,50,000/-
Operate through tripartite agreement amongst Student (Trainee), Training Provider and the Bank
NSDC would stand as a guarantor for a certain percentage of the default
NSDC, IAMR and States have been involved by MHRD in evolving the NVEQF document from Dec 2010, and a Draft Note has now been prepared for Cabinet Approval.
Funding for a pilot in schools of Haryana and Bengal has been released. Four SSCs are engaged in this Pilot

17. Multiple initiatives being taken by NSDC to develop the skills ecosystem , 2011-12 – (II)5 6 7 8
World skills competition
Business Plan competition
Media Campaign
Work with international organisations
NSDC acted as nodal agency for the World Skills Competition hosted in London
Results limited but good learnings
Preparation underway for the 2013 competition
“Power to Empower” – India’s first Skills enterprise competition organised by NSDC and CII jointly
71 educational institutions and over 3000 students participated in the competition
Work on- going on a media campaign to make skills aspirational
Multiple international organizations being engaged with to leverage existing skills and knowledge base
UKIERI
ILO
AIEC
UKCES EU
DFID

18. Sector Skill Councils : Ensuring Industry Involvement
TRAINING NEED ANALYSIS
CURRICULUM DEVELOPMENT
ROLLOUT OF TRAINING
ASSESSMENT AND CERTIFICATION
Creation of Occupational Standards
Towards National Vocational Qualification Framework
Labour Market Information System
Skill Development Plan
Accreditation of Training Institutes
Academics of Excellence
Training of Trainers
Guidelines and Participate in Assessments and Certification of Trainers and Trainees
Sector Skill Councils (SSC) consists of representation from Industry Member, Government Bodies, Industry Associations, Business Leader and Training providers to ensure participation of all ecosystem members.
Till now 11 SSC have been approved in main high growth sectors such as Automotive, Retail, IT/ITES, BFSI, etc.

19. 13 SSCs approved and a strong pipeline – June of the high priority sectors covered, move towards large and informal sectors
Approved by NSDC
(11 till now)
SSC Proposals under Diligence with NSDC
(10 SSC presently)
SSC Proposals in Pipeline
(9 SSC presently)
Auto
Domestic Workers
Mining
Security
Construction and Real Estate
Capital Goods
Retail
Foundry
Hospitality
IT/ITES
Agriculture
Pharmaceuticals
BFSI
Handicrafts
Beauty & Wellness
Media
Textiles
Steel
Healthcare
Logistics & Transportation
Aviation
Gems & Jewelry
Plumbing
Oil & Gas
Rubber
Education and skills
Leather
Electronics Hardware
Telecom
Food Processing
Priority Sectors
Large Workforce
Informal Sector

20. NSDC also receiving support from multiple international organizations in SSC incubation
International Network of Sector Skill Organizations
Seminar on Setting up SSCs held for all SSC leaders in May 2012 by 4 International Leaders of SSCs from UK & Australia
AIEC
Support to Retail SSC – CEO of Service Skills Australia provided 2 week on site support in May- June Key areas covered, stakeholder engagement, Standards, LMIS, SSC processes etc. Preliminary talks to support one more SSC.
UKIERI
Project Funding released by end April
Two SSCs, Agriculture & Media to be provided on site support
A second UKIERI fund provides for support to Food Processing SSC EU
Project to support three SSCs in capacity building over three years. Year 1 focus on Auto SSC.
NSDC
Workshop and Framework to 10 SSCs for creation of NOS in occupations covering 80% of workforce, by individual RFPs.

21. Agenda Overview Government Initiatives in Skill Development in India
NSDC Model: Encouraging Public Private Partnerships
Areas of Collaborations and Key Recommendations

22. Current Collaborations with Australia: Several MOUs Signed between Australia and India
MOU between XLT and Jaypee Group: Training to focus on metals, construction, automotive and mining
TAFE NSW- Sydney Institute  and Heraud Inc : MOU to provide services to proposed College, facilitating academic collaboration, professional development, study tours, student and teacher exchange, and international student recruitment.
Central Institute of Technology (Australia) and the Central Board of Secondary Education (CBSE):  To develop models of VET engagement to help students to complete school with both a secondary school certificate and job oriented and job linked skills. Pilot with delivery of 4 courses- Design, Retail, Music production and Beauty therapy.
Australian Vocational Training  Employment Group (AVTEG) and JIS Group 
College of Innovation and Industry Skills (CIIS) and JIS Group
Kangan Institute in Australia to support training of 425 ITI teachers in Karnataka and Maharastra.

23. Possible areas of collaboration
To set up skill development programmes in cooperation with NSDC or NSDC Partners
Industry based curriculum development
Training of Trainers including NSDC Partners
Sharing of best practices in training particularly in sectors such as Mining, Construction, Retail, Healthcare, Hospitality etc.
Training in Agriculture: Sharing International standard training modules for India to learn.

24. Possible areas of collaboration: Sector Skill Councils
Capacity building and organizational support for Sector Skill Councils
Sharing standards in development of Occupational Standards
Development of Curriculum Framework
Sharing best practices in assessments, certifications and accreditation.
Development of Labour Market Information System
Development of Qualification Framework

25. Multiple forms of interventions possible on the skill development space
Build capacity to train and skill people
Own capacity
Build capacity
Use expertise in certain areas to provide curriculum and training material in select areas
Leverage and consolidate existing capacity to deliver quality training
Standards and Curriculum
Leverage existing capacity
INTERVENTIONS
Community based interventions
Systematically focus on areas and create skill led community interventions

26. Different business models can be built Illustrative : Single Entity with different Centre's
Option 1
Key activities
Research and development of content
Methodology
Train the trainer
Overall strategy and management
Skills Centre
Sector specific centres of excellence
Focus on sector requirements
Regarded as best in class training centres for a particular sector/ function
COE for Sales
COE for Sector 1
Corporate training for
Sector 2 ….
Innovative models can be
developed
depending upon requirements
of the secotr
Learning centres (owned) dispersed all over the country for sector/ functional expertise
Learning
centre 1
Learning
centre 2
Learning
centre n

27. Different business models can be built Illustrative : Multiple corporate / Training entities partnering
Option 2
Key activities
Research and development of content
Methodology
Train the trainer
Overall strategy and management
Holding Entity : Lead player
Sector/ area specific centres of excellence led by different firms
Focus on sector requirements
Regarded as best in class training centres for a particular sector/ function
COE for Sales
Entity 1
COE for Customer Service Entity 2
COE for Sector Entity 3…… ….
Innovative models can be
developed
depending upon requirements
of the secotr
Learning centres (owned) with different entities dispersed all over the country for sector/ functional expertise
Learning
centre 1
Learning
centre 2
Learning
centre n

28. Take Charge Leaders!
A LEADER IS ONE WHO TAKES THE FIRST STEP TOWARDS A GOAL HE DEEPLY CARES ABOUT, IN WAYS THAT OTHERS WISH TO FOLLOW
Source: BCG Analysis