-First Draft-

SKILL DEVELOPMENT IN INDIA:

A ROADMAP FOR
DEVELOPMENT

Bhanu Joshi
bhanu.december@gmail.com
Intern, Indicus Analytics

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 CHAPTERS

Executive Summary page 1

Section 1 page 4-6

i. Introduction

ii. Need for Skill Development

iii. Status of Skill Development in India

Section 2 page 7

i. Data Collection & Limitation

Section 3 page 8-13

i. Vocational Education Models in India

ii. Institutions & Models of the World

Section 4 page 14-17

i. Case Studies of six developing countries on Skill Development

ii. Lessons for India

Section 5 page18-22

i. Future Roadmap

ii. Conclusion

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 EXECUTIVE SUMMARY

Vocational Education and Skill Development has been high on priority for the present government.
The PM is very keen on setting up of a National Skills Council and the PMO issued a notification
constituting the "National Council on Skill Development" with the PM as its chairperson.

The following deliberations are hence imminent:

• To make the existing vocational education system relevant to market needs, a major
restructuring of the system is required.
• The vocational education system is largely irrelevant to the needs of the
labour market. Employment outcomes of graduates are poor.
• The management of the vocational training system is fragmented and lacks basis
for informed policy decisions.
• Private training cannot compete on a ‘level’ playing field. They face regulatory
barriers for entry into the training market.

This paper goes into studying the following:

• Analyse the present structure of vocational training in the country.

• Study the various models existing around the world on skill development.
• Make a comparative study of developing countries where Skill Development process
have started and
• Suggest roadmap/lessons for development of Skills Initiative in India.

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 SECTION – 1
A – Planning Commissions Objective and recent trends

1. On 15th May 2008, the Cabinet approved the setting up of a “Coordinated Action on Skill
development” which was to be headed by the Prime Minister and envisaged the creation of many
offshoot organisations like the setting up of National Council on Skill Development and the National
Skill Development Coordination Board (under the Planning Commission), the National Skill
Development Corporation (under the Ministry of Finance) amongst others. Creating a pool of skilled
manpower that could contribute by working in different sectors of the national economy was the focus
of the decision. This decision underpins employment creation, strengthening of the education system
and last but not the least channelising the demographic dividend towards knowledge based economy.

2. The Prime Minister’s National Council on Skill Development was to comprise of key cabinet
ministers and experts from the field who were to lay broad guidelines for a working policy and other
details of finance and administration. Their target by 2022 was to create a pool of 500 million skilled
labour.

3. The NSDCB was to be the implementing agency which was to comprise of secretaries of
seventeen central ministries, including four state chief secretaries and other experts. This body was to
strategise the implementation, coordinate, monitor, and evaluate the various aspects of the Skills
Development Initiative. The committee was to be assisted by five Sub-Committees1 to look into
various aspects of the skill development

 Curriculum revision
 Remodelling Apprenticeship Training
 Evolving Vision on the Status of Vocational education & Training in Educational system
 Institutional Mechanism for Skill Mapping and Skill Inventory on Real Time Basis
 Improvement in Accreditation and Certification System.
The Sub committees have submitted two reports till date and nothing more has moved forward since
then.

B – Need for Skill Development

4. Human Resource development entails the dual process of capacity building and mobilization of
human capital which results in modernization, greater global trade, quantifies productivity and helps
in integrating the economies. Modernisation, development and providing employment is also the best
and the most effective ways of reducing chronic poverty, gender and income inequalities which are in
abundance in developing nation like ours.2 The other outcome is that it opens decent jobs, progress in
development and other opportunities by enhancing their skills and provides them with security.

5. It has been said that “Human capital is a key input to both the use and production of ideas”. Many
international organisations like the ILO and the UNCTAD have reiterated the fact that the benefits if
the new age technological revolution cannot be benefited without creating a striking balance of skills
with technology. India opened its market in the year 1991; post 1990 Globalisation, Liberalisation and
Privatisation have become keywords where Globalization implies international competitiveness: firms
have to compete not only on the basis of price but also on the basis of quality. The pressure of
1
http://planningcommission.nic.in/reports/genrep/skilldev/rep_skilldev5.pdf (For more details log onto
http://planningcommission.nic.in/reports/genrep/rep_csa.htm)
2
Solow Model of Economic Growth

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competition has prompted firms to ensure price competitiveness, greater flexibility, enhanced quality,
timeliness, and the capacity to introduce new products and services effectively. And since the quality
of human resources is an important determinant of competitiveness in all respects, a greater focus
towards developing human resources is seen throughout the world as essential for socioeconomic
progress.

6. The East Asian developing countries like Malaysia, Taiwan, Thailand, Singapore, and Korea have
empirically proven that investing heavily on HRD and especially on skill sets can give a major boost
to the economy and the country can gain socially and economically. The UNCTAD report puts it as:

“This is also one of the lessons from the East Asian development
experience, where rapid industrialization and skill accumulation were
achieved by expansion of the education system in conjunction with a step-
by-step upgrading of the skill intensity of economic activities. Doing so not
only reduced the technology gap with advanced countries and raised the
demand for educated labour, but also provided the training and experience
needed to realize the economic potential of educated workers. The
difference is that in low-income countries this upward spiral does not
necessarily need to occur in skill-intensive manufacturing activities but –
depending on the specific sectors in which a country has a competitive
edge – might need to be based in primary sectors, unskilled labour-
intensive manufacturing, or services where this diversity reflects the
heterogeneity within the group of low-income countries.”

7. India forms a more depressing picture which seeks immediate response for skill development.
India’s population growth has declined over the years but the labour force is growing. Much of the
population is still rooted in traditional activities and structures. Significant elements such as the
cultural, social and political traditions of the country should, of course, be retained and education has
a particular role to play in that. But other aspects should change if people are to move out of poverty.
Over half of the labour force is still engaged in rural activities. Although there has been a significant
movement away from traditional occupations, mass ignorance, reliance on old technological methods
is still rampant.

C – India and the status of Skill development

8. The Indian education system is the largest amongst the commonwealth countries 3. The path of
education development can be traced from the National Policy on Education, 1986, which provided
the basis of modern education in India.

9. The Economic Survey 2007-08 points that by 2026 the working population (15-64) would be
64.2% from 62.9 % in 2006. Recent surveys by The Boston Consulting Group point towards an
Indian surplus of 56 million working population versus a global deficit of 47 million by 2020. But the
problems are galore. India as yet has not been able to match its skill size with that of either US or
China. The improvement in education sector with particular focus on vocational education has been
stalled. In addition India would be unlikely to surpass the skilled labour supply of the United States in
the next 20 years, because a large proportion of its population with a college degree — mainly women
3
STATUS OF EDUCATION AND VOCATIONAL EDUCATION IN INDIA, presentation made by Apeejay Foundation

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— will not be participating in the workforce.4 The investment requirement are high and the
government seems vary of involving the private sector. In such a scenario the opportunities and
challenges lie in front of the Indian state.

10. In the last two decade India’s skill population has been growing at an average rate of 2% annually.
The trend that is being noticed is that students are acquiring higher levels of education which means
that percentage of skilled labour in the workforce is increasing. But the basic point remains that a
majority of the country’s population remains unskilled, in 1983 this figure was 83% which in 2004 is
still high at 77%.In 2004, 45 percent of the rural population was illiterate. In urban areas, however,
there has been remarkable progress in workers transitioning from unskilled to semi-skilled and from
semi-skilled to skilled. The percentage of skilled women living in urban areas (14 percent) is close to
the percentage of skilled men (16 percent).3 In fact, between 1999 and 2004; the average annual
growth rate in skilled women (7 percent) was about 1.5 times higher than the growth rate in skilled
men. Nevertheless, in 2004, the illiteracy rate among women — 28 percent — was more than twice as
high as the rate for men, and women lagged behind men in both the semi-skilled and skilled
categories

11. Mobility is very high across all states in India. 5 It has been seen that southern states are rich in
skills while northern states show a more skewed representation of skill sets for e.g. Uttar Pradesh
accounts for 16% of the skilled residents of India but a meagre 5% of this is skilled labour (hold
degrees or other professional certificate). On the contrary a state like Delhi has the highest proportion
of skilled individuals (20%), but houses only 6 percent of India’s skilled population. Hence, it can be
concluded that there exists vast gaps between the states and also between the workforces.

4
Boston Study Group Report
5
Indiastat and NSSO data

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 SECTION -2
Data Collection

1. The source (NSSO) that collects data and analysis on education in India does not distinguish
between Secondary Education and Vocational Education. Hence, it’s not possible to come up
with an analysis of the status of vocational education in India6. It is also imperative to note
that no state government or for the matter the central government keeps a log of the data on
vocational education in the country.

2. A lot of research has been done on the importance of vocational education in India but there
hasn’t been any report to highlight the impact or outcome of vocational education in India.
Another part that needs serious evaluation is the matching problem7 an inventory on how
many jobs were obtained after the manpower underwent training.

3. In a market driven economy, the demand and supply match is most important. Though the
Ministry has come out with reports that predict sectors or fields in which employment
opportunities will be available by 2015 but there is need for yearend analysis and reports on
the status of employment for vocational/skill labour in India.

4. There are studies that have been conducted and exist which quantify this system like
(skillsUSA) and hence a model needs to be included by the NSSO or any other private
organization which undertakes a study taking a parametric view of the above so that the
impact of vocational training in particular sectors compared to any other form of education
can be observed.

6
The 2004 NSSO round of the NSS which has just been completed has a module on vocational training.
7
Vocational Education and India’s Skill Deficit, Debroy B.

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 SECTION - 3
Vocational Education Model in India

School Level Vocational Training

1. The Vocational Education Program (VEP) was started in 1976-77 wherein stress was to be
made in the vocationalisation of secondary and general education in India. This category like
others (viz primary, secondary and higher) fell in to the Ministry of Human Resource
Development. The Pundit Sunderlal Sharma Central Institute for Vocational Education
(PSSCIVE), responsible for developing the courses, has listed 104 but has developed course
materials for only a quarter of those.8

2. Presently students who complete Grade 10 are streamlined into this training by conducting an
entrance test. Since a majority of students take to higher education the ones enrolled in
vocational training are looked upon as students who haven’t performed too well in the
examination or don’t have the capital/money for further studies.

3. The Vocational Schools/Institutions offer a total of over hundred courses in various areas like
that of agriculture, business and commerce, humanities, engineering and technology, para
medical staff, home science etc. There are 6800 such schools enrolling around four lakh
students which is utilizing on forty percent of their capacity. 9 In spite of vocational training
students opt for higher studies due to the poor labour market entry.

4. World over enrolments in vocational streams are on a rise. Developing and developed world
account high numbers of students enrolled for vocational or skill training. Different systems
may have quite different proportions of general education content in their technical/vocational
tracks and quite different modes of delivery, but even if these parameters are taken into
consideration the numbers in India are very low.

5. Hence it is imperative to find a model that is appropriate and fixes well in the Indian context.
There are models of best practices that exist in various countries like the Chile’s CODESSER
program10, which has ushered a new example in PPP by harnessing a business arrangement that covers
finance and performance.

Vocational Training in Public Sector

8
MHRD Report, 2004
9
WB Report on Skill Development in India
10
http://translate.googleusercontent.com/translate_c?
hl=en&sl=es&tl=en&u=http://www.codesser.cl/index.htm&rurl=translate.google.co.in&twu=1&usg=ALkJrhiw
FGCyR_EBldwJxry-7esBYN9rbg

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 6. The Central/State governments run a ‘Certificate level crafts training’ popularly called the
ITI’s which provides training to about 700,000 students. It is open to 5 million or so students
a year who leave school after completing Grade 10. About 80percent of the students take
admission in engineering courses, and the remaining go into non engineering trades. But it
was noted that 60% of the graduates remained unemployed.11 The main reasons for the same
were (a) limited growth and labour demand in the manufacturing sector, (b) mismatch
between the skills attained and those actually in demand, and (c) mismatch between the skills
taught and the graduates’ own labour market objectives.12

Training for the Informal Sector

7. The demand and supply constraints have inhibited development of skills in the informal
sector which counts for 90% of employment in India. The most important training providers
for these sections are the Community Polytechnics, Jan Shikshan Sansthan and the NIOS
(National Institute of Open Schooling). None of the programmes have been evaluated or
analysed.

Private Provisioning for Training

8. ITC (Industrial Training Centre’s) are fewer in numbers compared to the public sector ITI’s.
It has been seen that the average duration of courses being run in ITC’s were shorter
compared to ITI’s. Another conclusion was that the ITC graduates do not fare better on the
labour market than do graduates from ITI’s.13

11
ibid
12
Integrative manufacturing & problems with manufacturing
13
World Bank Report

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Institutions and Models existing around the world
9. Many models exist in and around the world that have successfully provides knowledge, skills
and attitudes to its population. If India wants to move on the path of Skill Development then
sweeping reforms in this sector are required which will begin with a study of the institutions
and mechanisms that offer vocational education in India.

10. There can be three main types of skills formation system based on where the training takes
place14 :

a. In schools as part of the formal education system

b. Informal training centres outside th school system
c. Within enterprises

School- based Vocational Education & Training

11. Comprehensive High Schools: This model exists in the US and Sweden where students take
practical course according to their interest and aptitude in one single school, regardless of
their career interests. This model can be emulated in developing countries like ours because
school leavers should always have some skill sets so that they can earn incomes. The only
drawback is that since the curriculum is generalized, which is not sufficient for jobs since that
requires advanced occupational skills.

12. Vocational & Technical Schools: This is the predominant model that is now being adopted in
many low-income countries15. They run parallel to academic schools that prepare students for
higher education. France, where such models have been adopted, admits students at the age of
13 for two or three years after which they earn a Vocational Proficiency Certificate. These
serve two purposes: prepare youth to work in skilled jobs and cater to students that do not
want to pursue long academic studies. Republic of Korea, Taipei and China have extensively
adopted this model and have results shows these models to be of success.

Non Formal Training Centers

13. Vocational Training Institutes: They are run by the Ministries of Labour or Human Resource
Development. Training is provided to youth who have completed their formal education. The
training varies in length from a few weeks to 2-3 years. The advantages lie in these
institutions being focused on one subject or purpose i.e. training of work and respond quickly
to the labour market needs.

14. The Latin American Model: This training is based at a training centre designed for both
working adults and young school leavers. These are run as autonomous training agencies that
maintain close links with industry through strong representation of employers in their

14
Dekra : Study of Skills Development Process and Institutions
15
UNDP Report & Skill Development Asia

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 managing and governing body. They are separate from academic schools; thereby maintain
the standard and keeping away from the prejudices of higher education.

Enterprise Based Training

15. Training by Formal Sector Enterprises (The German Model): Apprenticeship systems
developed in Europe where apprentice offers labour to a master craftsman in exchange for a
small wage. It is directly linked to the market, and is self financing.

16. Another German system (the dual apprenticeship system) combines practical and theoretical
training. Classrooms function once in a day while practical training is provided in the
enterprise for about four days. In addition apprentices sign an employment contract with the
enterprise which gives them work experience and salary. Almost 70% of German students go
through the dual system. It also provides scope for continuing training for advanced levels. 16
This can be a perfect system for India but it requires high amount of coordination among
employers’ associations, labour unions and public administration achieving which are
extremely difficult.

17. The Japanese Model: Students completing basic education go to general secondary education,
and from there they either enter firms that provide entry-level training or go on to tertiary
education.

18. Training by Informal Sector: This is a dominant model in Sub Saharan Africa and the Indian
sub continent. A verbal contract is concluded wherein the master craftsman working in the
informal sector receive a training fee, in return of education. It is practical, self regulating and
self financing. The only problem is that its gender bias, perpetuation of traditional
technologies, and lack of standardization17.

19. The World Bank studied all of the above system and concluded that these models can be
successful only if sufficient labour demand is available.

“Overall, any mode of training for industrial and commercial

occupations can be cost-effective when the institution is well

linked to employers, adequately financed, efficiently organized

and sufficiently autonomous to adjust the size and content of

courses to meet the quantitative and qualitative dimensions of

employment demand. At the same time, enterprise training

and skills training centres have been shown to be more cost effective

than vocational schooling.”

16
Academie: Journal on Science and Employment, 2007
17
IMacs & CPISC

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 20. The conclusion can be that countries evolve with a skill formation systems over years, but in
many cases a sweeping reform in education system was able to change the education system.

21. Many countries have undergone structural adjustments. These primarily comprise of
economic liberalization of capitol, products and the labour economy. New technologies,
enterprise, teamwork skill, marketing skills have to be developed which are different from the
existing skill sets.

22. All the countries have faced difficulties providing training through public training systems,
but the systems that have evolved from isolation, have maintained a culture of competition are
seen to be doing good.18 Few countries are performing well like those of Chile, South Africa
& Australia in which the education reforms were built on ideas of reduced public involvement
in training provision, partnership in governance and increased reliance on market mechanism.

23. All the countries showed three distinct trends:

a. Establishment of National Coordination or Consultative bodies to govern trading

systems. The research shows that only those boards who had statutory powers and
who had representations from the employers excelled, rest failed.
b. Secondly, it was favoured that devolution or autonomy to the institutions always
increased functionality and accountability of the institution.
c. Innovations in training delivery from narrow pre employment courses to
multipurpose services that include continuing adult vocational education. Hence ICT
holds a lot of promise for providing expanded delivery through cost effective
measures.

24. Positive developments have been seen in training finance. Biggest rend is seen in the usage of
non public resources for skills development which includes payroll levies on employers,
increased tuition fee paid by families of trainees or enterprise, community support, donations
etc. This can’t replace public funding of the Skill development project but can definitely
complement if implemented properly.

25. Similarly private, non government training has been underappreciated as a source for skills
development. An Edexcel survey pointed out that NGO providers are more responsive to the
market needs, and often apart from fulfilling the market commitments also work on social
commitments like inclusion of women in the workforce.19

18
WORLD DIDAC Report
19
Edexcel Survey on NGO partnering with Skill Development Boards

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 SECTION -4
1. It has been observed that some states are performing better than other in the development of skill
development. The prime reason for such a development can be:

• Better infrastructure
• Industrial activity existing in these states
• Correlation between minimum level of education and vocational training
• Acquisition of Formal Training

2. This can be gauged from the fact that they have registered a remarkable increase in the enrolment
of students in the ITI’s/other training organisations and the employment opportunities for the trained
manpower has tripled.20

B- Case Studies: Learning from other experiences:

The Asian Development Bank in one of its report21 titled “Improving Technical Education and
Vocational Training Strategies for Asia’’ studied six developing countries where the Bank had
invested money on Skill Development. The study came out with some lessons which can be
instrumental for India which is to embark on the Skill Development.

This report made a comprehensive study of six developing economies viz. Maldives, Marshall
Islands, Nepal, Pakistan (Baluchistan), Papua New Guinea (PNG), and Sri Lanka. The case studies are
definitely very narrow to generalize in to the systems but nonetheless provide valuable input into the
area of study.

The report has been evaluated on the following five parameters:

1. Nations economy and its relation with Skill Development.

2. Link between skill development and industry/employers.
3. Training Delivery and Role of private trainers
4. Administrative Mechanism
5. Financial Mechanism

Parameter 1: National Economy & its relation with Skill Development 22

20
Report , Skills Commission
21
The report can be accessed from http://www.adb.org/Publications or http://www.adb.org/education

13 | P a g e
Three of the six projects (Nepal, PNG & Maldives) were aimed at training the informal sector. 85% of
Nepal and 75-90% of PNG’s labour force is in the informal sector, hence training this section was the
focus of the investments. At the same time, Pakistan, Marshall Islands & Sri Lanka were trained for
modern sectors.

Lessons for India:

1- For India, training of the informal sector can be of great benefit with delivery through NGO’s.
The study showed that modus operandi need to be foolproof and scale of assistance by the
government need to be particularly worked out.
2- Major constraints were seen with the low female workforce participation which in many cases
can be culturally determined. It was found that in order to increase the labour force
population, women need to be involved.
3- Pakistan’s case study pointed out towards Polytechnics not being able to produce the required
output because “…most of the needs based on discussions with industry leaders are for lower
level personnel—-operators and skilled workers. This has not been the major area of expertise
of the polytechnics.”
4- Sri Lankan project focused on technician level training, which is justified in keeping with the
“advanced manufacturing sector of the Sri Lankan economy”
5- One conclusion that can be derived from the case studies was that all projects aimed at
poverty reduction as their objectives seem incompatible with the technician training projects.
A major study by the World Bank in the year 1990 also concluded that social objective was
rarely achieved without a strong economic foundation. Hence training must be directed at
employment possibilities i.e. “just to give greater access to vulnerable groups without
attention to labour market absorption, is likely to lead to frustration and failure.”

Parameter 2: Link between skill development and industry/employers.

Maldives was to have Employment Sector Council, Pakistan established District Advisory
Committees (DAC’s) & Sri Lanka developed Industrial Council (DIC’s)

Lessons for India

1- Employer Advisory Council failed, business people were busy and could not participate.
Representatives of the employer association fixed themselves on essential bureaucratic
positions.
2- It was observed that the Employer Council be given more authority over decisions like
curriculum and training. Similarly it should be thought that what incentives do employers
have to participate in advising or managing institutes (opportunity costs involved, efficiency
etc)
3- In case of informal sector the study showed the situation was more explosive. It was observed
that the Councils were not interested in self employment initiatives hence considerable
amount of attention should focus on market analysis which detail the occupation that are
likely to generate self employment for example study of export market or analysis of local
market for products likely to be in demand.

22
The Study is derived from the Asian Development Bank report on status of skill development project in 6
countries

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 4- The Marshall Islands undertook labour market research, in Nepal communities were to decide
the project needs and the skill sets to be developed. This was seen as the steps in right
direction. The Government of India started the training for rural youth for self employment
wherein training was provided in association with an institution or a master craftsman. The
evaluation report said:
“Over 1.5 million youth were trained during 1992—1993,
of whom about one third became self employed, 15% became wage
earners, and half remained unemployed. An evaluation concluded
that the project had not achieved its objective because of the
inappropriateness of the skills imparted and the lack of assistance
from the IRDP in setting up businesses23”

Parameter 3: Training Delivery & Private Players Training

Lessons for India: Training Delivery

1- All the projects reviewed showed an interesting trend. Short term projects scored higher
points compared to long term (2-3 months programme). The conclusion drawn is derived from the
opportunity cost involved in development.
2- The development of the modular training and Competency Based Training (CBT). It was
found that vast resources were to be pooled in for developing advanced skills. All the countries under
study pointed that CBT puts instructors under intense pressure to perform and there was a lack of
interest in the workforce to shift from their traditional skill utilising occupation to ‘modern
occupations’.
Lessons for India: Private Training

1- All the six projects supported private participation. The private players were involved in
programmes like management, instruction, delivery etc.
2- The Sri Lankan project was supported by Church, NGOs and other private organisation
3- The analysis of the programme shows lack of regulation was a major bottleneck that rendered
the plans useless. But it has to be pointed that the regulation should not stifle or kill the private
initiatives just as in the case of Pakistan the government reduced its role to training but did not
provide any stimulus for the private players to grow or employ the workforce being churned out from
their training centre’s

Parameter 4: Administrative Mechanism

The Nepal model built a National Council for TEVT, other five countries worked towards developing
a Labour Market Information (LMI) mechanism. The analysis:

Lessons for India:

1- A World Bank study report reviewing the status of LMI in Africa concluded that though
LMI’s were good on paper but never really worked on ground. The reason elaborated were the

23
ILO 1998a, 175

15 | P a g e
difficulties of institution building, recruiting trained analysts, and collaborating across organizational
lines.
2- Across countries, it was observed that decentralisation stimulated accountability, mobilisation
of resources and linkages with local markets. Sri Lankan model developed authority to 10 colleges
and provided assistance for management development. This model went further to support setting up
of a voluntary organisation which would be the authority for registration and accreditation of
technicians.

Parameter 5: Financial Mechanism

1- Sri Lanka and PNG employed a ‘Training Fund ‘mechanism for mobilising allocation of
funds. Training Fund system allocates finance to different priorities across wide areas, and
help to stimulate grass roots interest through preparation of competitive proposals. WB found
this to be a cost effective method of development which stimulates training provision.

2- The Nepal and the Marshall Island developed a “Competition Model” as a mechanism of
training development. Study for the same is not available but it has been seen that competition
with private players as stakeholders can be beneficial.

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 SECTION - 5
1. Linkages with industry are the single most important factor in success of establishing Skill
Development Programmes. The Indian Government is working with CII for establishment of
a ‘Skill Development Initiative’ that plans to bring the industry on board with the
government’s plans.24

2. Labour Market Analysis is indispensible for proper direction and feedback for training
systems but is vital for the informal sector.

3. Entrepreneurship training, marketing, and business support should be designed and,

preferably, managed by people with successful business experience and skills, not by civil
servants or bureaucrats, or even trainers without business experience. This seems to be
neglected in the roadmap provided by the Government of India and the Planning
Commission.

4. Private Training provisions should be encouraged but public funding should not be ignored.
Initial and incentives for the industry should be provided by the government.25

5. Investment in reform can make public training systems more responsive to the changing
economic requirements in countries resulting from openness and globalization. The role of
government in skills provision should be more sharply defined. Governments in East Asia
(Singapore, Republic of Korea) succeeded not only in stimulating the supply of skills, but
also in anticipating and generating demand for skills. This requires extraordinary foresight
and collaboration between economic planners and skills providers. These conditions do not
obtain in other countries, where unwieldy, supply-led systems predominate. The role of
government should become more strategic, moving away from a preoccupation with training
provision to concentrate on the following priorities:

(i) Fostering the growth and development of nongovernment training providers through
partnerships

(ii) Promoting social equity in training markets

(iii) Filling gaps where nongovernment providers fail to respond—-e.g. reaching the
informal sector, and promoting strategic growth areas and skills

(iv) Facilitating market functions not ordinarily performed by the private sector, such
as policy development, setting standards, training instructors, development and
dissemination of market information, and monitoring and evaluation of outcomes.

24
http://www.cii-skillsdevelopment.in/
25
Vocational Training Institute of Construction Industry; Annual Report

17 | P a g e
 6. Nongovernment training institutions and enterprises probably account for the main part of
regional capacity for skills development, and should be part of any reform dialogue. Efforts
must be made to:26

(i) Recognize and encourage nongovernment training provision, fostering a “level

playing field” to stimulate greater competitiveness with the public sector

(ii) Facilitate the contributions of formal sector enterprises to worker training through
provision of financial and material (e.g. instructor training) incentives

(iii) Encourage employer associations and trade unions to provide training for their
members 27

(iv) Increase worker productivity through training services for upscale informal sector
enterprises, especially those engaged in manufacturing for niche markets, such as
export markets.

• The most successful matching grant schemes are demand-driven, implemented by the private
sector, and aim to create sustained training markets. Increasing the flexibility of VET within
the mainstream education, proposal on an alternative education model can stimulate skill
development at an unprecedented rate.

26
www.manufacturingdiploma.co.uk
27
The Report on skill development GOI also suggested Unions to be stimulants in the growth process.

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