Knowledge Base >> Employers>> Ecosystem for Skill Development
Ecosystem for Skill Development
On last independence day, 1600 new Industrial Training Institutes (ITIs) were announced. The Cabinet recently added Rs 1,500 Crore to the Rs 2,000 crore budget allocation to upgrade the existing it is. The labour ministry seeks to quadruple its training budget in the eleventh plan. Skill development is on top of the agenda for the government.
However still there are several bottlenecks for this task. There are twenty government ministries and departments besides DGET, MHRD, NCVT and SCVTs dabbling in skill development. It leads to over-regulation and under super-vision. Regulators must shift from certification, registration and accreditation to measuring and ranking institutions on standardized outcomes. Institutions must receive autonomy to craft their programmes, make hiring decisions, charge realistic fees and offer market relevant courses. The Apprenticeship Act and the Contract Labour Act retard on-job skilling. The Apprenticeship Act is overly restrictive with industry restrictions, one year term etc., and sabotages jobs that account for 70% of competence development in some countries. Jobs under the Contract Labour Act for those below 30 years of age or unemployed must receive the same labour law dispensation as jobs under the Apprenticeship Act or the Employment Guarantee Act.
Most unemployable individuals can-not self-fund their skill training, and third-party financing is rare and risky. But the contours of a non-government, non-NGO ecosystem for reducing unemployability is emerging with candidates willing to borrow and microfinance institutions willing to lend for skill programmes with job visibility.
There are three risks for private financing; a) candidate gets trained but gets no job, b) candidate gets a job but is unproductive and fired, and c) candidate gets a job, is productive but leaves.
But the private ecosystem is experimenting with managing these risks with assessments (fitness for purpose), entry gates elimination, exit gates selection, balancing offline and online training, conditional offer letters and keeping costs manageable.
We believe that some of the million statistically independent experiments currently being run will find an ecosystem for self-sustaining system of skill development to reduce unemployability.
