The establishment of a large number of institutes of higher learning points to an effort to meet the demand for white-collar professionals. However, the problem is particularly acute with respect to blue-collar workers.
Despite the best efforts of more than 20 ministries through various skill development programmes, we have created an annual supply of only one million workers, leaving a shortfall of 50 million personnel. This will make it difficult for India to emerge as a manufacturing hub of the world, after China.
Realising the limitations of the Government, both India Inc and the policymakers have joined hands and initiated some corrective measures. One such key initiative is by the Directorate General of Employment and Training (DGET), one of the key bodies assigned to develop workforce with vocational skills. It has launched programmes like ‘Up-gradation of 1396 Industrial Training Institutes (ITIs)' and the Modular Employable Scheme (MES) in public-private partnership (PPP) mode.
‘Up-gradation of 1396 ITIs on PPP', a supply-side financing technique, focuses on enhancing existing infrastructure by providing an interest-free loan of up to Rs. 2.5 crore to the private sector partner (PSP). Though the scheme has upgraded more than 800 ITIs, it is often deliberated upon as an inappropriate method for service delivery. Similarly, in MES, DGET provides a per student support of Rs 15 per hour to the PSP, which provides such courses. However, the model has its own implementation challenges. Demand-side financing technique demands a robust monitoring and evaluation framework for measuring the performances of individual institutes.
KEY CHALLENGES
The answer lies in setting up a hybrid PPP model, which would incorporate the merits of both financing techniques. Besides creating the robust framework, the onus lies on the government to undertake the challenging task of bringing about an overall change in the present system of vocational education and the PPP institutional structure. A few key changes that need to be implemented are:
Viability gap funding (VGF) should be redefined as 40 per cent of the total cost rather than capital cost. The rule has been made keeping in mind large infrastructure projects where capital cost constitutes bulk of the total cost, but is inappropriate for service delivery project, which needs support at the operation stage also.
Government norms for performance should be output-based rather than input-based. Existing norms such as class size and student teacher ratio should be replaced with more realistic technique, that is, output-based norms such as employment generation and student pass ratio which would drive operational excellence while providing operational flexibility to the PSP.
Finally, it is time for the government to acknowledge the contribution made by the private players, or profit-making institutions, in providing quality education. Historically the role played by non-profit organisations in education sector has been very crucial, however, in the present scenario, such non-profit institutions have reduced.
Allowing profit making institutions would induce transparency and capital market efficiencies into the education sector, besides making it easier for the private sector to access capital.
(The author is Executive Director and Leader-PPP, Government Services. The views expressed are personal.)