National Skill Development Corporation November 2010siteresources.worldbank.org/EDUCATION/Resources/278200... · National Skill Development Corporation ... Investor Servicing

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National Skill Development Corporation

– November 2010

Dilip Chenoy

MD & CEO

1Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.

…. However plagued by inadequate skilled manpower

High rates of drop outs in the education space

Employability of the skilled a challenge

Very low enrolments for VET

1 3

Only one in four engineering graduates in IndiaIs employable, based on their technical skills,English fluency, teamwork and presentationskills and of the 4 lakh odd engineeringgraduates, who graduate each year, only about20% is good enough for India Inc.

- NASSCOM

2In service training levels very low in India

4

Skilling getting

a major policy

thrust


Large skill gap witnessed in India across 21 key sectors


Prime Minister’s National Council for Skill

Development

National Skill Development

Co-ordination Board

Government

Initiatives17 Central Ministries

Private sector

initiatives

NSDC created as a part of the government’s co-ordinated

action in the skills space

NSDC structure

NSDC is a Public Private

Partnership created by the

Ministry of Finance

• 51% stake by industry

• 49% stake by GOI

Initial funding of ~ INR

1000 cr received from the

GOI and parked with the

NSDF for use of NSDC

Target skilling / up skilling

150 million people by 2022

by fostering private sector

participation


GENESIS OF NSDC

Feb 2008-Dec 2008

FOUNDATION PHASE

Jan 2009-Aug 2009

Dec 2008 - Board Constituted

July 31st 2008 -NSDC Chairman

Appointed

Budget speech 2008-2009,

Formation of NSDC announced

Round 1 - 8 Proposals received;

2 shortlisted

IMaCS appointed –Skill Mapping

Reports

Mckinsey & Co appointed to work on mandate and

Roadmap

NSDC Significant Milestones: 2008 – 2010

OPERATIONAL PHASE

Sept 2009 onwards

Proposal Call & Evaluation Process

finalised; IMaCS & Seth Duaappointed

Round 2 : 8 Proposals received

Formal Launch of NSDC

FM reviews NSDC

DISBURSEMENT PHASE

Feb 2010 onwards

Gram Tarang – 21,000 to be trained in 5 years

GJEPC – 18,000 to be trained in 10 years

B-Able – 1 million to be trained in 10 years

3 proposals cleared for funding (Rs. 45.38

Crores)

5

Draft - Not for circulation

Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.

Proactively catalyze

creation of large,

quality vocational

training institutions

Create

Reduce risk by

providing patient

capital

Improve returns by

providing viability

gap funding

Fund

Support systems

required for skill

development• Sector skill councils

• Quality Assurance

• Information system

• Train-the-trainer

Enable

Create the

vision and help

define the path

Demonstrate

commitment to

the purpose

Create a viable

ecosystem

Investor Servicing

NSDC to achieve mandate through three key pillars

6



Key elements of NSDC funding

• Any organization with scalable, sustainable business model that ensures

employability of the resources trained

• Including start upsWho gets funded?

What is the

amount of funding?

What is the form

of funding ?

DescriptionElements

• ~Upto 75% of the project cost

• Debt at subsidized rates ; other features like moratorium built in depending

upon nature of project

• Equity

• Grant funding (only in very select cases)

Is there

special focus?• NSDC is looking to fund businesses that seek to create employable people

across all sections of the society


Robust process designed to ensure rapid turnaround in the

process

Proposal Evaluation Committee (PEC)

• Recommend the proposal for

approval by the Board or,

• Consider proposal not

worthy of further

consideration

• Form a view on the proposal

based on discussions after

financial, technical and legal

due diligence for discussion

at the PAC

• Detailed evaluation of worthy

proposals

• Financial , technical and

legal due diligence on the

proposals

Roles and responsibilities

Proposal Approval Committee (PAC)

Diverse representation from the MoF, private equity, NGOs,

industry

Board

Representatives of key stakeholders – both government and

private sector

Chairman and CEO of NSDC

Due diligence partners

NSDC team

Proposal Introduction and evaluation – test of

responsiveness, technical, financial and legal due

deligence

• Final approval of proposals

recommended by the PAC

Turnaround of

< =3 months

targeted for

proposals

8



Processes and Manuals Created

Proposal Evaluation

Procurement Manual

Diligence Manual

Funding Guidelines

Proposal Template for NGOs and Others

Financial Template for Business Plan

Agreements : Grant, loan and equity

Communication & Branding

Brochure Printed

Standard presentations for funding agencies,

prospective proposers, industry associations

Hindi & English website

Human Resources

HR Manual & Policy Document


INTRODUCTION

INVITATION

FOR PROPOSAL

(IFP)

EVALUATION &

APPROVAL

As per Standard Template

Submission of PAC Report

Test of Responsiveness

Proposal Evaluation Committee (PEC)

Submission of PEC Report

Evaluation of PEC Report by the

Proposal Approval Committee (PAC)

Issuance of MOA and Negotiations, Finalization of Pre-

Disbursement Conditions, Collaterals etc.

Approval of Proposal by Board

Consideration of PAC Report by Board

9

Proposal Evaluation & Approval Process


NSDC – The Journey so Far

Plan going forward

Agenda


Agenda

NSDC – The Journey So Far


12 proposals already approved, strong pipeline going forward

In addition, 26 proposals under evaluation

Note : Additional capacity being created through government grants not included

Proposals Number Funding

requirements

People trained

in year 1 /

year 10

Training

capacity per

annum

Names of

proposals

Funded 4 Rs 64.58 cr ~ 10000 / 1.5 Mn ~ 0.2 Mn IIGJJ, B Able,

Gram Tarang,

iSkill

Approved by

Board

8 Rs 250.98 cr ~ 119000 / 17.1 Mn ~ 3.05 Mn * Centum, IAHV,

IL&FS, Gras,

Edubridge, iStar,

Pratham,

Approved by

PAC

4 Rs 113.25 cr ~ 7640/2.79 mn .59 mn CREDAI,

Empower,

MERC, IISD


13 of the 20 priority sectors already impacted within

approved and funded proposals

Note : Sectors not covered include Chemicals &Pharma, Media & entertainment, F&F, IT&ITES, Education, Health Care, Transportation &Logistics


~253 locations covered across 27 states of India

S. No State Locations

1 Uttar Pradesh 30

2 Maharashtra 27

3 Madhya Pradesh 25

4 Andhra Pradesh 21

5 Orissa 19

6 Tamil Nadu 18

7 Gujarat 16

8 Karnataka 14

9 Rajasthan 14

10 Punjab 12

11 Himachal Pradesh 7

12 Haryana 7

13 West Bengal 7

14 Uttarakhand 7

15 Jharkhand 6

16 Delhi/NCR 5

17 Bihar 5

18 Kerala 3

19 J & K 2

20 Tripura 1

21 Sikkim 1

22 Pondicherry 1

23 Nagaland 1

24 Meghlaya 1

25 Manipur 1

26 Assam 1

27 Arunachal Pradesh 1

253


From Employment to Employability

Select case study – B - ABLE

• Rs 30.3 Cr – Debt financing

• No of centres to be launched – 400

• No of people trained in 10 years – 1 Mn

• Capacity created per annum – 0.2 Mn

DescriptionElements

Deal value and size

Business model

Progress till date

• Hub and spoke model for centre creation

• In addition to classroom training guaranteed

4 week apprenticeship with a prospective

employer

• Tie ups with corporates like L&T and Tata

dealers established

• 6 trades being covered – Agriculture and

allied activities, Construction, Tourism,

Banking, Hospitality, Food Processing

• 3 centres set up – Purnia, Dausa and Dehra

Dun

• 49 enrollments


From employment to employability

Select case study – Work Skills

• Rs 1.1 Cr Equity (27% stake) ; 12.2 Cr Debt at

12%

• No of centers to be launched – 383 across 11

states

• No of people trained in 10 years – 11.57 Mn

DescriptionElements

Deal value and size

Business model

Progress till date

• Created as JV between NSDC and Centum (a Bharti subsidiary)

• Franchisee model with governance structure put in at different

levels

• Govt grants being used to target BPL students, but attempt to

move towards self sustaining model of funding

• Innovative use of existing infrastructure to impart training

• Advance stages of discussion with KVIC for skilling workforce

• Discussions with state governments underway

• Content being developed for skills training in different sectors


From employment to employability

Select case study – Gram Tarang

• Rs 10 Cr – funding for Capex for 1 year

• No of centres to be launched – 5

• No of people trained in 5 years – 21000

• Capacity created per annum – 1000

DescriptionElements

Deal value and size

Business model

Progress till date

• Targeted at tribal youth in naxal affected

areas

• Training centres being created to train people

in Auto CAD, advanced welding etc

• Training on advanced machinery funded by

NSDC

• Fully residential programme

• 4 centres with capacity of 1000 people

already operational

• Equipment (CNC Lathe, CNC Milling,

CAD/CAM lab bought), affiliation from NCVT

received


Multiple channels being used to enhance brand and reach

Seminars and

presentations

• Aptech

• DLF Foundation

• ESSAR

• Everonn

• GRASIM

• Hindustan Unilever

• Hughes

Communication

• India Can – EduComp

• Industree

• JCB MART

• NIIT

• NIS Sparta

• Punj Lloyd Reliance

RMoL (Raj. Govt.)

• REI-Sahaj

• Schneider

• Tata Chemicals

• Tata Tele

• Trent

• Voltas

• Volvo

• Wadhwani Foundation

• LIQVID

Connect with

Corporates

• ACMA

• ASSOCHAM

• CAPSI

• CII

• CII – India @ 75

• DFID

• FICCI

• IAMR

• IGCC

• IGNOU

• ILO ISTE

• NABARD

• NASSCOM

• NIOS

• PHD CHAMBER

• SIAM

• TVET UK

• UNDP

• WORLD BANK

• INDIAN BUSINESS

CHAMBERS

Connect with

agencies

Website developed and

being constantly

upgraded

Brochures created and

being distributed

extensively in seminars

etc

Conceptualization of

Business Plan

Competition for disabled

people with National Trust

Print and Web

•Aspen Aspire Skills

•Automotive roundtable

•CII – YI Round Table

•CII National and North &

South Councils

•FICCI Skills Summit

•IGCC

•IGNOU

•IMA

•Indo German JWG (MOLE)

•NASSCOM

•National Workshop on

Skills – MP Govt.

•PA Forum

•Skills Workshop Min. of

Food Processing

•USOF, DoT

•Yuva Parivartan

•-CII Northern Council

• CII Western Council

Region

•EFI National HRM Summit


Sector skills councils being set up across sectors-Process initiated

• Funding for first sector skill council Automotive Skill Development Council

(ASDC) approved by Board

• Discussions underway with 13 other sectors for setting up SSCs

• Auto, Construction, Retail, BFSI, Energy, Textiles, IT/ITES, Security, Domestic

Help, Handicraft, Plumbing, Food processing,Travel & Tourism, Healthcare

• Meetings held with officials from UK, Australia, New Zealand and German

Skills Councils

• Best practices sharing with experts from ILO, WB and INSSO

• Communication material created for advocacy


Organization and processes being developed to ensure smooth

operations

Proposal evaluation and monitoring

Evaluation

• Procurement manual

• Diligence Manual

• Funding Guidelines

• Proposal Template for NGOs and others

• Financial template for business plan

• Agreements for grants, loans and equity

Monitoring

• Checklist of Reports for Contract

Monitoring

• Report Formats for Financial & Technical

Monitoring

• Streamline reporting processes for on time

reports in standard formats

• Nomenclature for issue of certificates

Internal processes

HR

• Performance Review System

• HR manual

• HR strategy under review

…..

Organisation

• Committee structure created – Proposal

Evaluation Comm, Proposal Approval

Committee etc

• Responsibilities being defined for different

verticals in the organization

Document Management

• SDMS RFP ready for release

Illustrative


Attempt to ensure quick turnaround of proposals Timelines to be standardized over time

Proposal

name

Date of

receipt of

proposal

Test of

Responsiveness

Final Evaluation

and approval by

Proposal Eval

Comm

Recommendation

by Proposal

Approval Comm

Proposal

tabled to

Board

Final

approval by

Board Funding

I Skill 9 35 5 7 0 NA

Pratham 11 11 5 7 0 NA

Edubridge 68 92 3 3 NA

I Star 26 29 3 3 NA

GRAS 7 28 8 13 NA

Turnaround of < =3 months targeted for future proposals

Time taken (in days) between different stages in the proposal evaluation process - Illustrative

Indicative

timelines

going forward10-15 days 30-45 days 30-50 days 30 days

Evaluation stage Decision making stage

Avg TAT of 1.5

months achieved

Note : Benchmarked with PE funds where typical TAT is 3 months and banks where TAT is 2-3 months for similar proposals


Agenda

Plan forward


FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Total

Total Proposals per year to be Funded (nos.) 25 32 44 52 60 65 62 50 42 31 23 14 500

Small ticket proposal 6 11 16 21 24 25 22 18 15 11 9 6 184

Medium ticket proposal 16 18 24 27 32 35 34 28 24 18 12 7 275

Big ticket proposal 3 3 4 4 4 5 6 4 3 2 2 1 41

Total Trainee Output per year (nos. lakh) 1.2 6.1 15.7 33.4 60.2 97.9 146.1 203.9 266.4 331.8 395.1 454.2 2011.9

25

32

44

52

6065

62

50

42

31

23

141.1 6.1 15.7

33.460.2

97.9

146.1

203.9

266.4

331.8

395.1

454.2

0

50

100

150

200

250

300

350

400

450

500

0

10

20

30

40

50

60

70

1 2 3 4 5 6 7 8 9 10 11 12

Total no. of proposals (in nos.) Total trainee output (in lakh)

To skill 150 million by FY22

Thank you

Contact Information:

[email protected]

Documents

National Skill Development Corporation November 2010siteresources.worldbank.org/EDUCATION/Resources/278200... · National Skill Development Corporation ... Investor Servicing