National Skill Development Corporation (NSDC) Crisis
The ongoing crisis within the National Skill Development Corporation (NSDC) highlights the risks associated with launching a private-public partnership (PPP) institution with vague roles and inadequate oversight.
Current Issues
- The removal of the CEO in May due to financial irregularities and lack of due diligence in loan disbursement and recovery.
- Challenges in lending practices, including loans to non-existent training centers or habitual defaulters.
- The crisis comes at a time of urgent need to bridge the skill gap in India's workforce, an ongoing concern for India Inc.
NSDC's Foundation and Objectives
Established in 2008 as a not-for-profit in PPP mode, NSDC was intended to act as a financial body providing funds for training institutes running skill-development programs.
- Government holds 51%, with associations like Nasscom, CII, and FICCI holding the remaining 49%.
- Initially aimed to ensure job placement through private-sector involvement.
Challenges and Expansion
By 2015, NSDC's mandate expanded, adding new challenges with the Skill India Mission:
- Became the nodal implementing agency for various skill schemes, requiring different managerial abilities.
- Operates four main schemes, including the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and the National Apprenticeship Promotion Scheme.
- Oversees over 2,500 centers and involves 49,000 employers, alongside other training schemes like the Craftsmen Training Scheme.
Operational Challenges
For an organization with around 200 staff, managing such extensive responsibilities across India is challenging, leading to patchy placement records and concerns over training quality.
- A comprehensive reorganization of the skill development-delivery architecture is necessary, alongside reassessment of NSDC's role.
- The National Apprenticeship Promotion Scheme may offer a more robust PPP model through on-the-job training in private enterprises.
Conclusion
NSDC's experience demonstrates the complexities and limited success of involving the private sector directly in government functions within India.