National Skill Development Scheme and its vision mission and objective

National Skill Development Scheme

The National Skill Development Corporation, (NSDC) is a one of its kind, Public Private Partnership in India, under the Ministry of Skill Development & Entrepreneurship. It aims to promote skill development by catalyzing creation of large, quality, for-profit vocational institutions. 

NSDC provides funding to build scalable, for-profit vocational training initiatives. Its mandate is also to enable support systems such as quality assurance, information systems and train the trainer academies either directly or through partnerships. NSDC acts as a catalyst in skill development by providing funding to enterprises, companies and organisations that provide skill training. It will also develop appropriate models to enhance, support and coordinate private sector initiatives. The differentiated focus for the 21 sectors under NSDC’s purview and its understanding of their viability will make every sector attractive to private investment.

Vision

NSDC was set up as part of a national skill development mission to fulfil the growing need in India for skilled manpower across sectors and narrow the existing gap between the demand and supply of skills. The Union Finance Minister announced the formation of the National Skill Development Corporation (NSDC) in his Budget Speech (2008-09): "There is a compelling need to launch a world-class skill development programme in a mission mode that will address the challenge of imparting the skills required by a growing economy. Both the structure and the leadership of the mission must be such that the programme can be scaled up quickly to cover the whole country."

Mission

Upgrade skills to international standards through significant industry involvement and develop necessary frameworks for standards, curriculum and quality assurance

Enhance, support and coordinate private sector initiatives for skill development through appropriate Public-Private Partnership (PPP) models; strive for significant operational and financial involvement from the private sector

Play the role of a "market-maker" by bringing financing, particularly in sectors where market mechanisms are ineffective or missing

Prioritize initiatives that can have a multiplier or catalytic effect as opposed to one-off impact.

Objective

To contribute significantly (40 per cent) to the overall target of skilling / up-skilling 400 million people in India by 2022, mainly by fostering private sector initiatives in skill development programmes and to provide funding. 

NSDC Structure

NSDC is a not-for-profit company set up by the Ministry of Finance, under Section 25 of the Companies Act. It has an equity base of Rs. 10 crore, of which the Government of India holds for 49%, while the private sector has the balance 51%.

To ensure superior decision-making, the NSDC requires a structure and governance model that provides it with autonomy, stature and continuity. Thus, the organisation has a tiered decision-making structure comprising: 

National Skill Development Fund (NSDF)

The Board of Directors

Board Sub Committees

Executive Council.

Each has a clear-cut role in NSDC’s operations, activities and strategy to facilitate the organisation’s mandate of coordinating and stimulating private sector skill development programmes with enhanced flexibility and effectiveness.

The 14 member Board has 5 government nominees and 9 are private sector members. The NSDC facilitates or catalyses initiatives that can potentially have a multiplier effect as opposed to being an actual operator in this space. In doing so, it strives to involve the industry in all aspects of

skill development.

The approach is to develop partnerships with multiple stakeholders and build on current efforts, rather than undertaking too many initiatives directly, or duplicating efforts currently underway. To scale up efforts necessary to achieve the objective of skilling / up-skilling 150 million people, the NSDC strives to:

Develop ultra low cost, high-quality, innovative business models

Attract significant private investment

Ensure that its funds are largely “re-circulating”; i.e. loan or equity rather than grant

Create leverage for itself

Build a strong corpus.

Keeping this in mind, the NSDC plays three key roles:

Funding and incentivising: 

In the near term this is a key role. This involves providing financing either as loans or equity, providing grants and supporting financial incentives to select private sector initiatives to improve financial viability through tax breaks, etc. The exact nature of funding (equity, loan and grant) will depend on the viability or attractiveness of the segment and, to some extent, the type of player (for-profit private, non-profit industry association or non-profit NGO). Over time, the NSDC aspires to create strong viable business models and reduce its grant-making role

Enabling support services: 

A skills development institute requires a number of inputs or support services such as curriculum, faculty and their training, standards and quality assurance, technology platforms, student placement mechanisms and so on. The NSDC plays a significant enabling role in some of these support services, most importantly and in the near-term, setting up standards and accreditation systems in partnership with industry associations

Shaping/creating: 

In the near-term, the NSDC will proactively seed and provide momentum for large-scale participation by private players in skill development. NSDC will identify critical skill groups, develop models for skill development and attract potential private players and provide support to these efforts.

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