Watch: How is the Modi Government Really Doing on the Skill Development Front?

In conversation with Jayant Krishna, COO of the National Skill Development Corporation, on the effects of Narendra Modi's Skill India mission.

Anuj Srivas: Hi, and welcome to The Wire‘s discussion on economic growth and skilling India, which a pet project of Prime Minister Narendra Modi. India’s demographic dividend has long been cited as an advantage for our country but lately a number of commentators and economic experts are also referring to it as a demographic ‘time bomb’, when at any given time of year we have 12 million people who are trying to enter the workforce but are only creating four or five million jobs depending on which estimate you go by. The manufacturing centre is not creating the jobs that we expected, the organised service sector –

M.K. Venu: In recent years much less than four million, actually.

AS: That’s true, 2009-2010 was probably the peak for jobs created and you know, India’s service sector, the organised service sector at least, has also seen layoffs in the last one year as growth sort of slows down. So today we have with us Jayant Krishna who is the chief operating officer of the National Skills Development Corporation, an organisation under the ministry that’s trying to ‘skill’ India’s youth and hopefully guide them towards a better future with greater opportunities. Could you start us off by talking to us, Jayant, about this, is it a time bomb and is the Skill India project working?

Jayant Krishna: The demographics of our country very clearly are like a double-edged sword: If you skill people well, if you create livelihood options, very clearly you can leverage a demographic dividend. If you don’t, it could become a demographic disaster, that’s a fact. Skills as an area has been ignored by the country for a very long time and the seriousness started in the 2007-2008 timeframe, when the new policy of development came into being, and then subsequently by the current government when it set up a new Ministry for Skill Development and Entrepreneurship. So we started pretty late; if you look at the countries in the Western world, they’ve had a three or four decade journey before they could stabilise their skill story, we started late, wasted almost six decades after independence, and now we’ve started and we don’t have the luxury of waiting for another three or four decades because the window of opportunity that the demographic dividend presents for the country is not unlimited.

If we don’t pull our act together and start delivering results then I think the country will pay a very heavy price. But the good story is that a lot of positive things have started happening and the initial results are pretty encouraging, but you know this is a huge space as I always say, the largest human resources exercise ever attempted by any country in the history of mankind, so the more you do the more seems to remain to be done.

MKV: How would you, Jayant, characterise the performance of the prime minister’s flagship programme called Pradhan Mantri Kaushal Vikas Yojana which was last year allocated Rs 1,500 crore for skilling people entering the job market, for youth entering the job market? There is a report commissioned by the government, which says that its performance has been much below par, it says about 8.5% of the people skilled have actually got jobs. Now how would you respond to that?

JK: See, the Pradhan Mantri Kaushal Vikas Yojana is the country’s answer to the issue, of who pays for skilling for people who are from the bottom of the pyramid. Many of them don’t know where their next meal will come from, how would they pay a fee if it is based on a cost-plus-recovery basis or based on market forces? The country’s answer to that is that skilling is for free. In the year 2015-16, we enrolled close to 20 lakh people there. Last year, I would not like to quote the figure –

MKV: You’re saying you enrolled 20 lakh people for skilling?

JK: For skilling under the scheme.

MKV: Under the scheme?

JK: Yes, and almost 14-15 lakh people got certified.

MKV: So you’re doing two million, about one and a half to two million a year, enrolling?

JK: See, under Pradhan Mantri Kaushal Vikas Yojana, in this financial year – see, last year was a year when we took stock, took a lot of corrective steps, a lot of improvements were brought about, so last year’s numbers under the PMKVY were down vis-à-vis the year before last. But this year, again, everything is hunky-dory, new systems have been put in place and things will improve. I’ll just tell you, you talked about the figure: the employment and self-employment figures for Pradhan Mantri Kaushal Vikas Yojana so far has been about close to 20%. But the actual data is more, because in the earlier scheme there was no incentive for training providers to even record this data. So this year, among other changes we have made, the last 20% of payment for training partners would come from the government, from the Ministry of Skill Development and Entrepreneurship through NSDC only when there was documentary evidence of employment, wage or self-employment having happened, this was one change we have made. Yes, there were some glitches, some inadequacies in the earlier scheme. I’ll tell you, earlier the scheme could have been done out of practically any training centre kind of thing in the country, this year –

MKV: So there was no quality monitoring?

JK: Monitoring was there, but not adequate.

MKV: Not adequate? Okay.

JK: So, for example, the year before last we did these 20 lakh people we talked about, they were enrolled in about 12,500 centres. This year we have reduced the number, this year there are almost 4,000 centres that we have and they go through a huge filtration level, in the sense that our sector skill councils, they prescribe that, for the job rolls that the training providers have an interest in, what kind of equipment is required, what kind of classrooms are required, the entire lab requirement, everything is there and every applicant and training partner has to apply for a centre-level affiliation, and all details of the centre are self-populated on a portal that we have, then some desk research happens, analysis happens and then a field visit happens by the NSDC through an outsource arrangement through the quality council of India. Then only when the centre is found to meet the requirements, then we give them different grades like three-star, four-star, five-starand so far, we have been giving targets only under the PMKVY to the centres which have four-star or five-star ratings. So a lot of quality improvement has happened, placement –

MKV: So you’re saying that through all these processes, you’re hoping that the number of people skilled, getting jobs will be more, going forward?

JK: The quality of skill delivery will improve, the job connect, the market connect will improve, for example, we have centre-skill councils, we said that let them also do the job of demand aggregation. Where do the demands come from? So far, just as a beginning, in the last few months itself they have been able to aggregate almost eight lakh jobs.

MKV: Actual jobs?

JK: Actual jobs, which is at the company level, location level, skill level, what role and level of ability –

MKV: You’re saying that this is real?

JK: This is real.

MKV: Eight lakhs will be delivered?

JK: Eight lakh job aggregation has happened, now the next challenge is how do we connect these jobs with the training partners, so that, you know, what they offer –

MKV: And these jobs are in which sectors generally? Construction?

JK: They are into all (sectors) – construction, IT, retail, hospitality, healthcare, agriculture, a whole lot of areas put together. You know, we have 40 sector-skill councils, not everybody has done but anywhere between 12-15 sector councils have aggregated these eight lakh jobs and this is just the beginning of the process. So I think that is happening, plus, earlier, most of the training in PMKVY used to be there at the NSQF level one and two, just the entry level. We have pegged that up to level three and four this time. Earlier, we used to stop at giving them the qualification packs and the national occupation standards. Then we started making the model curriculum, and not only that, we gave a book, a complete book, for each job role. That kind of hand-holding is being done, training of trainers has been made compulsory, you can’t start a centre unless people are trained by a sector-skill council centrally in a ten-day long programme.

MKV: These processes have been put in place in the last…?

JK: In the last few months, I would say in the last seven or eight months, these processes have been put in place, and –

MKV: But the big data, which you yourself told me earlier, in our earlier interaction, of the total employed or employable pool in India, which is about 480-500 million, right?

JK: The labour force size is almost estimated to be anywhere between 48 crore to 51 crore.

MKV: Yes, well, take it as 480 million. Of that, you told me that just about 5% of that has formal skills.

JK: Yes, I mean, again we don’t have data but in fact less than 5%, about 4% of people are formally skilled.

MKV: So you’re saying that 95% are not formally skilled?

JK: They are not formally skilled, so for them we have rolled out another programme called recognition of prior learning. If somebody, for example a silk weaver in Varanasi or a chikankari worker in Lucknow, or a phulkari artisan in Punjab, these are people who have the skills but they don’t have any formal certification, so what do we do, we do a quick assessment and a snap survey to find out what the gaps are. They have some skills, but what are the gaps? For example, a silk weaver of Varanasi: they may know the core weaving very well, but what they may not be very good at is design skills, they may not be very good at yarn-dyeing skills.

MKV: So you connect them with those skills?

JK: So we give them an incremental training of that, and then give them a certification for the entire job roll. But you know it’s a huge task, it’s a gigantic task. If I claim that everything is hunky-dory, everything is in place, perhaps not. But we’re all gearing up to make things happen.

AS: Just to interject here. Earlier we spoke about the difference between fee-based skilling, where if the person wants to get the pass-course certification he has to pay for it, or you know we have a number of government programmes, the most recent of course is the PMKVY, where the government subsidises and gives the NSDC a certain amount of money, and then we’ve seen that this sort of subsidised skilling has not worked in the past too. The Modi government’s PMKVY is just now, in 2013, but we’ve had the star programme, we had SITS way back in 2007, and there’s a lot of data to show that that hasn’t worked out as well. Why does fee-based skilling, where the person has to pay for it, why does that automatically encourage and result in higher placements, why does it result in higher quality skilling and education in the first place when it’s still being compensated, no one’s doing it for free, it just depends whether the person pays for it or the government subsidises it?

JK: Yeah, I think in the fee-based training, the coefficient of seriousness increases manifold from the training partners, from the trainers and from the students themselves. If something is given to you for free, you don’t value it as much as if you’ve saved or your parents have saved and paid for it. Therefore, in our fee-based training the placement percentage has been off, and in the one year’s data since the inception of NSDC, our experience has been almost 50% of the fee-based people have got wage-employment or are self-employed.

So definitely, to my mind, it’s my personal view, it may not necessarily be that of the ministry, but I think we have to take the fee-based training more seriously and have prior corporate connects before the batches start. Even our current training partners, if not all of them, at least a few of them, have very good industry connects, and they enrol students, they mobilise students for a course only based on definite placement assurances from corporates, which are documented, and then people also when they come there know that they’re going to get a job, and unless the person is useless, most of the people who pass out, they get a job with that corporate for which the batch is being run.

I think the seriousness goes up manifold, the quality of delivery improves and so on and so forth. One more thing, let’s look at states like Maharashtra and Gujarat, the states which are associated with a higher amount of investments, more manufacturing and industrial activity. They are the states where PMKVY does not do very well but the fee-based business happens, especially in Maharashtra, it happens very well. I think wherever the existing base of industry is good, the formal and organised play of industry is more, I think things work very well for fee-based training.

MKV: The other question which Anuj has discovered from the committee report – we’re coming back to the committee report because its a report set up by the government and it’s very critical of the manner in which things have gone on so far. One broader question – of course they make many accusations which you may not agree with – but one question that arises which Anuj said, correct me if I’m wrong, he said there is a suspicion of the private sector as a partner, right? That’s a constant, since this is a public-private partnership

JK: NSDC is, yes.

MKV: So there is the government committee report’s finding, that the private sector is not fulfilling its part of the obligation. Now I don’t understand what all this is about. Can you just throw some light on that?

JK: One can always argue that is the private sector or industry doing enough, or not doing enough, but let’s look at the entire genesis of the job rolls. Each of these sector-skill councils, the governing council does not comprise of industry people. They may have one or two – sorry, of government people. It largely has industry people. For example, healthcare is headed by Dr Naresh Trehan. Vandana Luthra heads our beauty and wellness. Mr Vikram Oberoi used until recently to head our –

MKV: Hospitality.

JK: Hospitality sector-skill council. Similarly, everywhere I think there are very very iconic people. The NASCOM chairman heads the IT and ITS council, Mr Ajit Gulabchand heads the construction, so very iconic – and they’re not just the chairman. The other people in the governing council are also who’s who of the industry, and what they essentially do, they brainstorm and then they decide which are the job rolls in their vertical which will constitute a critical mass in terms of wage or self-employment opportunities. They do the occupation mapping and then they develop detailed national occupation standards based on which the training happens.

MKV: And qualifications.

JK: And qualifications, though qualification packs are nothing but another name for job rolls, actually. And each qualification pack for a job roll will have multiple occupation standards and these occupation standards essentially come from the industry, and they go through the industry validation not by just one or two players, but by multiple players, not just the large industry, but the MSME sector also, the small sector also, before they become the national standards. So I think industry is chipping in, but are they doing enough? This is a debatable question, but very clearly, skills is an area where for six decades we had bare minimum industry involvement in skills, so I think this journey has started fairly –

MKV: So what exactly does the report say about the private sector?

AS: Two or three different points it makes. One, as Mr Krishna’s pointed out, clearly our industry captains spend a lot of time with these sector-skill councils, but one thing it brings up is the NSDC, while majority shareholding is held by industry associations, 100%, near 99% of funding comes from the government, so industry associations, companies are not putting their money where their interests really lie here. So they’re not – their funds are not coming out, and funding the SSCs, and so on, so do you think this should change in the years ahead? Should NSDC depend on purely, 100% government funding?

JK: No, NSDC could always raise funds –

MKV: Of course, private sector contributes more in terms of funding?

JK: Could, could contribute, but let’s also look at, see, NSDC’s not the only route through which corporates invest in skilling. Many corporates have set up their own iconic skill development centres, they do skilling for their own employees. Look at the IT industry itself.

AS: The finishing schools.

JK: Absolutely, so I think –

MKV: Like Infosys has its own finishing school.

JK: Absolutely, every major IT company, Infosys, TCS, Wipro, everybody has not just finishing, even technical schools and finishing schools, both. So I think this happens, and if you captured the data the entire private sector play in the skill development space, of the money that they contribute, which is not captured unfortunately in our country. It’ll not be second to the government at all, they spend a lot of money. So through multiple routes private sector chips in. They may not do it necessarily through NSDC. If NSDC could raise money from sources other than the government, yes, it could, it can and it should, but very clearly I think it’s not just a question of money being –

MKV: Do you think NSDC could go to the market and raise money? Kind of corporatise?

JK: It’s a not-for-profit organisation.

MKV: Why? Why can’t it be for profit?

JK: I think by design it was thought that, let’s also look at NSDC –

MKV: If you’re not-for-profit then you necessarily depend on donations from the industry, which –

JK: Yeah, so the training business that we promote, that is for-profit, in the sense all our training partners whom we fund, even they may be non-funded, they encourage skilling for profit, that kind of thing. But our founding fathers thought that the best form for NSDC is a not-for-profit organisation. And let’s also understand why, why was it set up as a PPP kind of thing. Couldn’t government have chipped in the rest of the equity also? Could it not have done it? It could have done it very easily, to keep it 100%. But it was thought perhaps, that you need the work culture of the private sector, you need the flexibility and operational freedom of the private sector, you’ll need a lot of velocity of decision making, it has to be faster, and you know, I think these were, and above all, to get the best of breed people from the industry and elsewhere to get into these roles, so these benefits are far more in creating an organisation which has a high degree of very, very good professional ethos, a good work culture, a very, very different responsive sensitivity, than what generally people in the country associate with government. So I think those objectives have been realised to a large extent and very clearly it was known that government funds would be leveraged and delivery will be through NSGC which was always thought to be a private sector company because of the benefits that we’re talking about.

AS: Correct, that’s true, and also I mean, another aspect, in terms of quality of skilling, so the sector skill councils, for our viewers who might not know, so they create as you said NOSs and QPs. The government panel that was constituted, one thing it points out is that a lot of the national occupation standards that have been created are too broad. For instance, they give a very nice example of if you want to skill a driver, for example, there are four different sector skill councils which each have their own NOSs about what a driver, a chauffeur, a truck driver and so on and so forth, and all of these are sort of overlapping and yet they are still not comprehensive when you compare it to a country like Korea or Germany and so on and so forth. I know that you’ve said this report has not been accepted by the government as of yet so there might be a lot of back and forth in the way it pans out in the end, but they explicitly state that this reason why our NOSs are not comprehensive enough is because there was a lot of private consultants who were brought in who perhaps didn’t do the job they were supposed to because this was based off monetary incentives and so on and so forth.

JK: We have 1,900 job rolls, and the same job roll being in multiple sector-skill councils or being made by multiple sector-skill councils, they’re very, very rare, very few and far between, such examples. But there was a situation that one SSC has made a job roll, but that job roll is demanded by other SSCs, so now we’ve started loaning

of job rolls, so any SSC could have made it, but any other SSC, as long as there is a business case, which is approved by NSDC, we allow them usage of job rolls, loaning of job rolls, to other SSCs and the entire compensation, assessment, number accumulation is allowed to the SSC which has loaned that job roll. So all these things are getting done, but, when you talk about the driver, let’s take for example, a light commercial driver, it’s not there in multiple SSCs, it is one, but the requirements of a driver in a light commercial vehicle versus a earth-moving equipment, these requirements are very different. Even, for that matter, light commercial vehicle and a lorry driver, they’re very different requirements. So now it’s very clear that any SSC can make it, and any other SSC, as long as there’s justification, can adopt it and start using it.

MKV: You know one bigger question, Jayant, you just said that you’re slowly moving to skilling say two million new people a year.

JK: Under Pradhan Mantri Kaushal Vikas Yojana could be a little more than that, then there’ll be fee-based also.

MKV: Then overall, if you add fee-based everything, aggregate about three million?

JK: No, everything put together, for NSDC itself, it will be about four million, in the coming financial year.

MKV: You’ll be skilling four million people?

JK: Indirectly, and then there’ll be other government of India programmes, there’ll be other corporate programmes, there’ll be state government programmes.

MKV: OK, so what is an adequate number according to you? If you look at the labour force, or the employable labour force, at 480 million, and if you yourself said that currently, formal skilling is received by less than 5%, right, which makes it less than 24 million, so how will you scale this up to at least, say 100-150 million? You’ll have to do that, right?

JK: It’s a challenge, it’s a challenge, if you really ask us, you know the country in the last policy in 2015 had embarked upon a target to skill 400 million people by the year 2022 –

MKV: So isn’t that, this 400 million people by –

JK: It’s a daunting task.

MKV: Yeah, it seems almost impossible, right? At the current pace of skilling that’s going on by you and others all combined?

JK: Yeah, so it’s a huge task, if you ask us whether we’ll be able to achieve that, nobody can answer that today. A lot more galloping of efforts is required, we’ll need to have more and more people come to us, take loans, set up, create investments in skilling, lot of corporates have to come. A lot of corporate skilling which already happens, that data needs to be dragged and captured, which is not happening today. So I think it’s a big task.

MKV: So currently you’re saying that we’re not even properly mapping as to how many people are getting skilled through multitude, through multiple efforts by a government, corporate sector, everything?

JK: Government, there is a mapping available. Government of India, which is the skills ministry, as well as other government of India ministries, as well as state governments, that data is consolidated, but corporate data is still not available, except in bits and pieces here and there.

AS: Jayant, the quality of skilling that happens in other ministries, has that come up to common standards? I know there was some concern over that over the last two years. Every ministry, 19 other ministries, I think, do some sort of vocational education but they don’t necessarily follow the NOS –

MKV: Ministries like what? Textiles and –

AS: Textiles, MHRD does a lot of things, but a lot of the common criticism from many in civil society in the past has been that these vocational education training efforts are not standardised, they’ve not resulted in good quality, so does NSDC want to reach out to the other ministries in this regard and sort of come up with something?

JK: I think it’s happening already, big time, for example, if you look at the Ministry of Housing and Urban Poverty Alleviation, they run a scheme called HUPA, sorry, NULM, HUPA is the name of the ministry and similarly, the rural development ministry runs a Deendayal Upadhyay Yojana, that kind of thing. So many of these courses are already aligned to the national skills qualification framework, and the job rolls map to the job rolls which are there in the overall skills ecosystem. So I think they didn’t start from there, but I think that mapping, and that, you know, that alignment is happening. We also have common norms, even norms for compensating training partners who do programmes for various government of India schemes and all that, or other government schemes, those are getting aligned to the same standards and largely it has been done. We didn’t start with that, but I think a lot of work has happened in the last year, year and a half, to bring forward this kind of aggregation and alignment of various government skilling schemes based on common norms.

AS: What’s also added to Mr Krishna’s burden, the difference between the 2009 skilling policy and the 2015 skilling policy is that the 2015 policy also adds the extra criteria that you have to place them at a certain wage, a tenable wage. Has that standard been met across different sectors and industries? You skill them, they go get placed, but the wages that they receive are –

MKV: You have to ensure a certain minimum wage, is it?

JK: See, let’s understand, every state government has a minimum wage, right?

MKV: Delhi has Rs 13,000, right, per month?

JK: Some levels, it will be less than that also, I think the unskilled levels it will be less than that. It is a state subject. Every state comes out with three or four categories of skilled, semi-skilled, unskilled workers –

MKV: Minimum wages.

JK: Minimum wages, kind of thing. But let’s understand, 91% of our jobs are in unorganised sector and in informal sector. I’m not saying nobody in this sector adheres to the minimum wages, but there are many who do not adhere to minimum wages.

MKV: And for that 91% I think our research is abysmally poor. I don’t think we have mapped that 91% properly.

JK: We have not mapped properly, there is some connect with that world, but not adequate, that’s a big challenge. There’s no other country in the world which has such a heavy composition of jobs in the informal and unorganised sector. Perhaps our rules, our labour laws, and a lot of other things which the industry found require a lot of relaxation, because of which workarounds were found, and even some of the big corporates resorted to contract manufacturing and outsourced manufacturing and so on and so forth. I think that’s very important because most of these jobs in informal and unorganised sector are not aspirational. Students don’t really look forward to them. I think it’s a challenge we, as a country, we need to fight, and minimum wages, the law can mandate, the law can do as much. End of the day market forces prevail. You can walk the talk when you engage with the industry, that please give premium to skilled people over unskilled people, but at the end of the day the demand and supply and the market forces take over. So regulation you can take this far and not beyond.

MKV: And the big challenge in the informal sector, Jayant, correct me if I’m wrong, is that most of them are also self-employed. Fifty-sixty percent are self employed.

JK: There is a fair percentage of them that are self-employed.

MKV: And this government also has focused on the self-employed, you know, the Mudra Bank –

JK: The Mudra Bank.

MKV: Gives loans to the self-employed, this whole Stand-Up India slogan that the prime minister has coined is about –

JK: Is about start-ups.

MKV: About the self-employed, right?

JK: Yeah.

AS: In fact, I think I just saw a news report a couple of days ago, I think NITI Aayog is now embarking on trying to get better data –

JK: For getting job data and all that, yeah, it was there in today’s newspaper.

AS: Today’s newspaper, correct, that’s what I meant. Great, so thank you for joining us and we look forward to your work.

JK: And my only request to all of you is please evangelise the skills, it needs a lot of evangelisation. Every media channel, everybody, every corporate house, every media leader has to walk the talk, then only his skills will become aspirational in the country. There are problems in the sector, we’re all working hard to resolve these problems, but as I said it’s a huge and daunting task and every stakeholder in the nation needs to work together.

MKV: But the best evangelisation is people getting jobs, and they’ll talk about it.

JK: Absolutely.

MKV: And of course, when they do that, when they do get jobs, we’ll talk about it, definitely. Thank you.