Context:

The report of the Standing Committee on Labour (2017-18) headed by an MP, Kirit Somaiya, on the “Industrial Training Institutes (ITIs) and Skill Development Initiative Scheme” of the Ministry of Skill Development and Entrepreneurship (MSDE). It was submitted to Parliament few months ago. Small shops, basements, tin sheds and godowns. These are not random workplaces but places where private Industrial Training Institutes (ITIs) are running in the country.

Explaining the scale-up of Vocational Education:

• The ITIs were initiated in the 1950s. In a span of 60 years, until 2007, around 1,896 public and 2,000 private ITIs were set up.
• However, in a 10-year period from 2007, more than 9,000 additional private ITIs were accredited.

What explains this huge private sector scale-up?

• Private training partners have mushroomed at the rate of five a day (mostly with government support) and it is clear that the government has been unable to regulate private institutions for quality.
• Private sector engagement in skill development has been taken up by standalone private training partners and not employers. The latter could have made the system demand-driven. Meanwhile, the lack of a regulator for skill development, with teeth, has led to poor quality affiliation, assessment and certification.

Concerns and Findings of Somiya Committee report:

• The Somaiya committee report is scathing in its tone and specific in details. It outlines instances of responsibility outsourcing, no oversight, connivance and an ownership tussle between the Central and State governments.
• The committee says that it is not efficiency but a disregard for norms and standards.
• However, the ITIs are not alone. The National Skill Development Corporation (NSDC) today has more than 6,000 private training centres. Since it has short-term courses and its centres open and close frequently, it is all the more prone to a dilution of standards.
• Number of ITIs increasing rapidly abut they disregard norms and standards. Due to short-term courses, vocational training centres open and close frequently they are more prone to a dilution of standards.
• With the increase in number of institutes, government has been unable to regulate private institutions for quality. Placement in NSDC training has been less than 15%.
• Private sector engagement in skill development has been taken up by private training partners and not employers.
• The employers could have made the system demand-driven. The lack of a regulator for skill development has led to poor quality affiliation, assessment and certification. There are instances of responsibility outsourcing, no supervision, illegal activities and an ownership tussle between the Central and State governments.
• The QCI did not follow accreditation norms created by the National Council for Vocational Training (NCVT). The NCVT is just a stamp with no role in actually assessing quality.
• The future of 13.8 lakh students in these substandard ITIs is at risk. If the same exercise were extended to other skill development schemes, the picture would be grimmer.
• Lax provisions of vocational training programs and no scrutiny is a major concern. For example the Standard Training Assessment and Reward scheme spent Rs. 850 crore in 2013-14 with no norms for quality.
• The report also reinforces disturbing findings of a national survey by the research institute (NILERD) of the Planning Commission in 2011 about private ITIs: had fewer classrooms and workshops for practice; and their teachers were very poorly paid.

So, what can we do systemically?

• A good point to start would be the Sharda Prasad Committee recommendations.
• We need better oversight, with a national board for all skill development programmes.
• The core work (accreditation, assessment, certification and course standards) cannot be outsourced. Board is required in vocational training that is
• Since we have the NCVT as a legacy, it should be used as a kernel to constitute the board. We should also have a mandatory rating system for the ITIs that is published periodically.
• A ranking of the ITIs on several parameters such as the one done by the National Assessment and Accreditation Council in tertiary education can be replicated.
• There should be one system, with one law and one national vocational education and training system.
• We need to create a unified national vocational system where the ITIs, NSDC private vocational trainers and vocational education in schools, and the other Central ministries conducting training gel seamlessly and can learn from, and work with each other.
• A unified legal framework can facilitate such a unification. The absence of a law has only weakened regulation and monitoring. What we need is a national vocational act that replaces all scattered regulations — recommended in the 12th Five Year Plan.

Micro-institutional reforms: Need of the hour:

• The ITIs have many internal issues such as staffing and salaries that need attention, as the NILERD nationwide survey in 2011 had found. There is also a critical need to reskill ITI teachers and maintain the student-teacher ratio.
• Since technology obsolescence is a continuous challenge, financial support envisaged through the NSDC should be extended to the ITIs.
• There has been a tremendous push by the government for private sector talent in government; perhaps it is worth considering talent from the open market to fill up higher posts in skill development.
• Institutional reforms such as moving the office of the Directorate General of Employment (the arm that has all data on employment) from the Ministry of Labour to the MSDE would help. It would also complement the Directorate General of Training already under MSDE.

Employers and financing

• This is the last but perennial challenge. Given the scale of our demographic challenge, a belief that financing from corporate social responsibility, multilateral organisations such as the World Bank, and the government will meet the financial needs for skill development is wishful thinking.
• The only way to mobilise adequate resources the right way is to do skills training, and have equipment and tools that keep pace with changing needs and ensure that employers have skin in the game.

Conclusion:

• The best possible available solution is through a reimbursable industry contribution (RIC) — a 1-2% payroll tax that will be reimbursed when employers train using public/private infrastructure and provide data.
• RIC, which is implemented in 62 other countries, was recommended in the 12th Plan and is an idea whose time has come.
• An estimate indicated that such a tax would generate ?17, 000 crore per annum for skilling in India — which is several multiples of State/Union governments’ current annual budget for skilling.
• Finally, while there is so much talk of skills for the future and the impact of artificial intelligence and automation, data show that 13.8 lakh students in the ITIs are suffering due to poor institutional accreditation.
• Placement in NSDC training has been less than 15%. Maybe if we take care of the present, we will be better prepared for the future.
• We need to create a unified national vocational system where the ITIs, NSDC private vocational trainers and vocational education in schools, and the other Central ministries conducting training gel seamlessly and can learn from, and work with each other.