New Solutions must for upskilling
July 2014

New Solutions must for upskilling

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RCM Reddy
RCM Reddy

RCM Reddy,
Chairman,
FICCI Skills Development Forum and Managing Director & CEO, IL&FS Education & Skills

IL&FS Education & Skills is one of the two organisations profiled by the global analyst McKinsey while assessing the success and impact of skill development world-wide. RCM Reddy, Chairman, FICCI Skills Development Forum and Managing Director & CEO, IL&FS Education & Skills spells out how the government and the industry need to collectively address the challenge of skill development in India

As one of the important stakeholders in the skills mission, what are your expectations from the Union Minister for Skill Development, Entrepreneurship and Youth Affairs?

The setting up of a new ministry is a welcome move. India is faced with the target of skilling 500 million by 2022. A dedicated department on skills development was the need of the hour, especially to engage the growing number of young people actively looking for employment opportunities.

Some key areas where the new minis- try must focus to ensure greater impact are :
Streamline the implementation of skills schemes and programmes between 18 ministries to attract more professional agencies and private sector partners to join the skilling mission. One important area will be creating uniform funding across ministries and departments with higher incentives for capex-intensive programmes.
Extend skills development within the scheme framework for the informal sector. The current framework of placement-linked skills programmes does not cater to people interested in self- employment. With less than 93 per cent of economy being non-formal, focus has to be on skills development for livelihood generation.
Fast-track PPP initiatives for setting up of ITIs and Polytechnics that facilitates quality training to create world class public infrastructure for vocational education and training.

IL&FS Skills India started its skill development programme way back in 1997. What were the challenges and how do you see the road ahead ?

There was no proven business model 10 years ago when we began our operations. Hence, we were left with no choice other than learning from international best practices and customising them to local needs. Today, we have mastered the process and re-invented it by engaging industry in delivery and implementation. Ever since we launched our first multi-skill centre at Hi Tech Weaving Park in Palladam near Coimbatore, Tamil Nadu, we have improvised on our training delivery methods and experimented to create a standardised scalable model that draws strength from the integration of technology, innovation, interactivity and industry relevance.

We are focused on bringing the next wave of innovations to cater to the ever- changing needs of industry as well as learners.
We are focused on two key areas : moderating the price point of skill services so that learners-especially from Bottom of Pyramid groups can afford training and improving the quality to make learner experience valuable.

Speaking of innovations in the skills delivery model, we are currently focusing on integrating skills development within mainstream education basis the National Skills Qualification Framework (NSQF). The objective is to reach out to the masses and bring vocational education at par with formal education.

How big is the challenge of skill development for India?

Among several challenges facing the vocational education sector in India, two of them stand in between India’s economic growth and its reaping the benefits of the demographic dividend.
First is inadequate infrastructure: As per Twelfth Plan projections, about 25 million new entrants would join the labour force in the next five years. In India, the per capita availability of institutions imparting formal education is much higher than those imparting vocational education. Poor presence of vocational institutions means the community is less informed about it and hence their poor utilisation. The location of institutions also affects access. Also, poor infrastructure facilities of classrooms, equipment, workshop, and trained teachers etc. within the institution affect the quality of training imparted, affecting learners’ future access to jobs.

The second is inadequate financial support through bank loans and scholarships. Several affirmative schemes of the government have been able to cover the costs of vocational education of people from BPL groups and minority communities. However, a major part of the population are not covered under any scheme and do not have any access to institutional loans either.

Do you see vocational training and skill development getting a boost under the corporate social responsibility as mandated under the new Companies Act?

We are working with some of the top PSUs and private sector companies to implement their CSR vision on skills development. We have already established pan-India operations in a hub and spoke model with our presence in 25 states through a network of 38 multi skills training institutes as hubs called IL&FS Institute of Skills(IIS) and another 250+ single trade skilling centres as spokes known as the IL&FS Skills Schools(ISS). With our outreach in remote, difficult terrains, left-wing extremist affected areas, it has become easier for the PSUs who have their establishments in such locations to partner with us. The Corporates also want to earn goodwill of the local communities and skill development has proved to be a big boon to their operations.

With Prime Minister Narendra Modi’s new thrust on skill development, does IL&FS have new plans for expansion?

There is no proven management tech nique that will deliver a skilled India. It would need new solutions and approaches, and that requires leadership – both at the political level and within the industry. We are happy to see the political will building right from the Prime Minster and are ready to support his mission of attaining shramev jayte or dignity of labour. We have already established 38 institutes and are keen to expand ourselves, especially in the Middle East and African countries, which also face the same demographic challenges as ours.

“We are happy to see the political will building right from the Prime Minster and are ready to support his mission of attaining shramev jayate or dignity of labour”

The IL&FS Skills website mentions that its aim is to train 4 million people by 2022 under the Skills Programmes for INclusive Growth (SPRING). How do you plan to achieve it?

We are one of the only training institutions in the country to offer skills development programmes to the entire learner spectrum. We wanted to create an institution which is able to cater to every individual who wishes to get skilled and does not have any entry barriers. With this objective in mind, we rolled out six different programmes including Skills for Jobs, Skills Upgradation, Skills for Good Governance, Skills at Schools & Colleges, Skills for Trainers and Skills for Entrepreneurship.

We have skilled 14,30,000 people on a pan-India basis. 4,00,000 of these have been skilled through placement linked programmes and are from Bottom of Pyramid groups, and mostly school drop-outs and 8th or 10th pass. Today, 49 per cent of our successful trainees are women, largely from the backward regions of the country.

As chairman of the FICCI Skill Development Forum, how well do you think is the industry geared up for the skill development mission considering that they too will benefit out of it? What are their concerns in this regard?

A few years back, we were discussing the demand – supply gap of trained manpower. Today, with the presence of several private training providers and affirmative government schemes, there has been a considerable deluge in the availability of skilled and certified manpower. However, the industry does not seem to be creating jobs at the same pace to absorb the millions joining the labour market every day. There is also the problem of large scale migration of labour which has its own repercussions of labour up- rising and increasing attrition rates.

Is industry adequately incentivised to boost skill development?

Low incentives have been acting as a dampener to the spirits of big corporate houses which have been investing heavily knowing the risks involved and the slow returns on investment. A favourable investment climate with adequate incentives through lower interest rates for loans and relaxed taxation norms will help the government boost private sector participation in skills development.

The National Skill Development Corporation has been asked to carry out skilling of 150 million Indians by 2022. What should the government and NSDC do to achieve this target?

We need to build a skills development model that is inclusive to achieve a ‘Skills for All’ agenda. The objective would be to address the issues of relevance in skill development in terms of Quantity, Quality, Outreach, Equity and Systemic reforms. There is also an urgent need to mainstream skills formation in the formal education system and, at the same time, adopt innovative approaches for skill creation outside the formal education system.

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