Friday, 3 July 2015

National Policy for Skill Development and Entrepreneurship 2015 | Skill India Mission

Why in news?
  • The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, in July 2015 gave its approval for the India’s first integrated National Policy for Skill Development and Entrepreneurship 2015.
    • The previous National Policy on Skill Development was formulated by the Ministry of Labour and Employment in 2009 and provided for a review after five years to align the policy framework with emerging national and international trends. 
  • The Cabinet also approved common norms for Skill Development Schemes being implemented by the Centre as well as an institutional framework for the National Skill Development Mission. (covered below)
    • This would help bring uniformity across the 70-odd skill development programmes (SDPs) being run by different government agencies.
  • PM formally launched the Skill India Mission on July 15, celebrated as World Youth Skills Day

1. What is the new National Policy for Skill Development and Entrepreneurship 2015?




Vision of the Policy : “to create an ecosystem of empowerment by Skilling on a large Scale at Speed with high Standards and to promote a culture of innovation based entrepreneurship which can generate wealth and employment so as to ensure Sustainable livelihoods for all citizens in the country”. 

Four thrust areas 
  • OBSTACLES: It addresses key obstacles to skilling, including:
    • low aspirational value, 
    • lack of integration with formal education, 
    • lack of focus on outcomes, 
    • low quality of training infrastructure and trainers, etc. 
  • DEMAND - SUPPLY: Further, the Policy seeks to align supply and demand for skills by bridging existing skill gaps, promoting industry engagement, operationalising a quality assurance framework, leverage technology and promoting greater opportunities for apprenticeship training. 
  • EQUITY: Equity is also a focus of the Policy, which targets skilling opportunities for socially/geographically marginalised and disadvantaged groups. 
  • WOMEN: Skill development and entrepreneurship programmes for women are a specific focus of the Policy. 
In the entrepreneurship domain, the Policy seeks to educate and equip potential entrepreneurs, both within and outside the formal education system. It also seeks to connect entrepreneurs to mentors, incubators and credit markets, foster innovation and entrepreneurial culture, improve ease of doing business and promote a focus on social entrepreneurship.

2. Institutional framework for the National Skill Development Mission
The Union Cabinet gave its approval for the institutional framework for the National Skill Development Mission in keeping with the commitment made during the Budget Speech for 2015-16. 

The National Skill Development Mission will provide a strong institutional framework at the Centre and States 
  • The Mission will have a three-tiered, high powered decision making structure. 
    • At its apex, the Mission’s Governing Council, chaired by the Prime Minister, will provide overall guidance and policy direction. 
    • The Steering Committee, chaired by Minister in Charge of Skill Development, will review the Mission’s activities in line with the direction set by the Governing Council. 
    • The Mission Directorate, with Secretary, Skill Development as Mission Director, will ensure implementation, coordination and convergence of skilling activities across Central Ministries/Departments and State Governments. 
  • The Mission will also run select sub-missions in high priority areas. 
  • Further, the National Skill Development Agency (NSDA), the National Skill Development Corporation (NSDC) and the Directorate of Training will function under the overall guidance of the Mission
  • The Ministry of Skill Development and Entrepreneurship (MSDE) provides a natural home for the Mission
Why do we need a policy/Mission for Skill development?
  • One in 10 adults reported having received any vocational training as per official data
Source: The Hindu
  • Rate of vocational training had barely increased between 2004-05 when the data was last collected and 2011-12. This was despite the fact that the UPA government announced an ambitious National Skill Policy in 2009 and created a National Skill Development Coordination Board earlier

  • It is estimated that only 4.69 percent of India’s total workforce has undergone formal skill training, compared with 52 percent in the USA, 68 percent in the UK, 75 percent in Germany, 80 percent in Japan and 96 percent in South Korea.
  • ~100 million fresh entrants to the workforce will require skill training by 2022, and ~300 million of the existing workforce will require additional skill training over the same time period. --> total ~400Million need to be give skills!
  • We have three distinct problems: 
    • matching (connecting demand to supply), 
    • mismatch (repairing supply for demand) and 
    • pipeline (preparing supply for demand). 
  • We confront a financing failure: 
    • employers are not willing to pay for skills or candidates, but are willing to pay a premium for skilled candidates; 
    • candidates are not willing to pay for skills but willing to pay for a job; 
    • banks/ microfinance institutions are not willing to lend for skills unless a job is guaranteed.
  • There are issues in all the present methods of skill development:
    • Vocational Training in schools – Earlier available to class 11 and 12th students, but few years back it was lowered to class 8th. - to incentivize students to complete class 8th at least.
    • ITIs - Industrial Training Institutions – private and public. 
      • Public sector has not expanded its network
      • Private institutions have shot up to 10000--> need more regulation and transparency on this front
    • Onsite industrial training – provided by corporates, in which India lags behind. as they prefer to employ already skilled workers. India has brought changes to Apprenticeship Act to promote onsite training 
      • In developed countries onsite skill development is a norm. 
  • National Classification of Occupation codes are a poor framework to align demand (what employers want) with supply (the skills kids have), and we need to move from periodic interventions to build a self-healing structure. 
  • Young job-seekers are unable to get a job without experience, but it is unclear how they can get experience without a job.
  • How to train them?
    • The massive divergence between real and nominal wages in our 45 job hubs (cities with more than a million people) is murdering migration at the bottom of the pyramid. It is much more efficient to send trainers to areas with high outward migration. But it is rarely possible because trainers are unwilling to move (this is not unique to India, even Russia’s Joseph Stalin was unable to get doctors to move to rural Russia).  
What steps has the govt taken so far?
  • Creation of the National Skill Development Fund (NSDF) in 2009, the launch of the NSDC in the same year, and creation of the NSDA in 2013, progress to date has been sporadic. 
  • Government notified the creation of the first dedicated Department of Skill Development and Entrepreneurship in July, 2014, which became a full-fledged Ministry in Nov, 2014, with NSDA, NSDC and NSDF, 33 Sector Skill Councils (SSCs) and 187 training partners under its purview. 
    • This was done because earlier there were about 70 odd initiatives under 20 different ministries and departments. 
    • This resulted in inefficiency and duplication of efforts. These all schemes will be taken over and converged.
    • The MSDE signs MoUs with different departments/ministries/PSUs (e.g. Railways, SAIL etc.) and provides services like curricula development, provisioning for staff, etc.
      • Such creative arrangements really make a lot of difference!
  • Further, the Training and Apprenticeship verticals, comprising of the entire network of Industrial Training Institutes (ITIs) and Apprenticeship Training schemes, were transferred from the Ministry of Labour and Employment to Ministry of Skill Development and Entrepreneurship (MSDE) on April, 2015. 
  • Skill India Mission launched in July 2015
Points worth appreciating in recent initiatives:

  • Some positives:
    • First, it is part of a multi-point agenda for creating jobs. 
    • Second, it strikes the right balance between continuity and change
  • It has changed the  problem frame completely. We have converged several initiatives
    • The outlines of a complex job-creation policy agenda are emerging — 
      • smart cities, 
      • Make in India, 
      • Digital India, 
      • GST, 
      • ease of doing business, 
      • labour law reform and 
      • cooperative federalism. 
    • This will combine with some of the wonderful “daily life” objectives listed in the new skill and entrepreneurship policy to catalyse productive entrepreneurship, like 
      • unique enterprise numbers for all enterprises, 
      • composite application forms for all approvals and registrations, 
      • revised exit policy
  • Continuity and change
    • One of the more painful policy narratives of the last few years has been junking everything done by predecessors but the new skill programme maintains continuity in the structures and leadership of sector skill councils, the National Skill Development Corporation (NSDC) and the National Skill Development Authority. The earlier target of skilling 500 million people has been revised to 400 million and unpacked into specific chunks.
    • The birth defects of the earlier Star scheme have been fixed in the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), which cleverly adds recognition of prior learning. 
    • New structure has a separate ministry for skills: putting ITIs, apprenticeships, sector skill councils, the NSDC, skill universities and the PMKVY under one roof not only improves coordination but also gives state governments and other Central ministries one neck to catch. 
    • The erstwhile Planning Commission’s decision to write a new apprentices act was smartly reviewed and the existing act was amended instead; these amendments create the space to take India’s apprentices to one crore from the current four lakh (China has two crore).
  • New connectivity being created by state vocational universities will be amplified by the proposed national vocational university; 
    • vocational universities pray to the one god of employers and have only 5 per cent of their kids physically on campus (the rest are in apprenticeships and distance education), and only 5 per cent of their kids are doing degrees. The rest are doing certificates and diplomas with modularity to go all the way to degrees.
Challenges ahead and way forward:
  • Implementation challenges
  • Convergence with existing educational institutions - higher, vocational, etc.
  • Right assessment of demand of industry
  • Quality v/s quantity
  • Laying standards
  • International competition
  • demand for a legislation regarding ‘Right to Skill'

[Sources: PIB, Business Standard, Indian Express]

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