Supporting Human Capital Development in Meghalaya (RRP IND 46166)

Skills Challenge Fund: Guidelines and Application Process

September 2013

IND: Supporting Human Capital Development in Meghalaya

CONTENTS

EXECUTIVE SUMMARY

I. NEED FOR A SKILLS CHALLENGE FUND IN MEGHALAYA 1

A. Introduction 1 B. Meghalaya State Skill Development Mission (MSSDM) 1 C. Concept of a Challenge Fund 2 D. Institutional Structure of MSSDS 3 E. Skills Challenge Fund for Meghalaya 4 F. Administrative Arrangements for the SCF 6 G. Assessment of SCF Quantum 7 H. Nature of funding (grant or loan) 12 I. Eligible Costs to be supported under SCF 12 J. Tax implication of Assistance from SCF 13 K. Audit arrangements for SCF 16

II. OPERATIONAL GUIDELINES FOR SKILLS CHALLENGE FUND 16

A. Application Process for SCF 16 B. Reporting & Monitoring 21 C. Outreach mechanisms 23

ANNEXES

1 Certificate of Incorporation and Memorandum of Association of MSSDS 24 2 Proposal Submission Guidelines 25 3 Proposal Appraisal Guidelines 33 4 Draft Agreement Between MSSDS and Skills Training Provider 41 5 „Charitable Activity‟-Notification 50 6 Annual & Monthly Planning Format 51 7 Format for Reporting Placement of Trainees 52

EXECUTIVE SUMMARY Skills Challenge Fund to be established under the Meghalaya State Skill Development Society1 1. A “Challenge Fund” is a financing instrument (grant or loan) to channel money through eligible institutions or service providers for fulfilling specific development objectives. Over 60 countries operate training funds for meeting a range of objectives such as building training capacity, developing competitive training markets, and improving the relevance and quality of training.2 It is important for Meghalaya to catalyze private training agencies to ensure that demand-linked training is provided. Research shows that a vibrant private sector training market helps to improve the quality of public sector training through increased service availability, diversity of training disciplines, and competition. 2. To support the efforts of the Meghalaya State Employment Promotion Council (MSEPC) to catalyze outcomes-based skills development in the state, a Skills Challenge Fund (SCF) modality will be used under the Project, “Supporting Human Capital Development in Meghalaya” to enable the Government of Meghalaya (GOM) to facilitate public private partnerships (PPPs) in skills training to meet the needs of different segments: rural and urban youth, girls and boys, drop-outs (at various levels) and school graduates, and those seeking employment within and outside Meghalaya. The SCF will be open for qualified private sector skills training agencies, not-for profit training providers, and Meghalaya-based public training agencies including the Industrial Training Institutes (ITIs) which are under the Department of Labor, polytechnics which are under the Department of Education, and training centers operated by other Government departments (e.g., Industries and Commerce, Tourism, etc.). 3. The SCF will be formed under the Meghalaya State Skill Development Society (MSSDS) which was established in December 2011 under the provisions of the Meghalaya Societies Registration Act, 1983, with the authority to receive funds from the government (central and state), and financial institutions, and to spend it for fulfilling the mandate of MSEPC. The SCF is proposed to be a distinct account head, and not a standalone fund corpus. The money shall be deposited in a separate bank account to be operated by a designated officer in GOM namely, the Director, Institutional Finance. Funds will be released to MSSDS based on periodic fund requests and progress reports provided by it. Disbursement will be made on the basis of specified training milestones. The detailed implementation arrangement laid down in the Project Administration Manual (PAM) will be followed. 4. Procurement will be under ADB‟s procurement guidelines. The bidding for the service providers will be open – there will be no limitation other than the requirement of meeting the national government‟s quality training provider requirements. Private and public skills providers will submit proposals as per the format and other pre-qualification requirements laid down for the SCF. The funds will be made available to any training provider, which meets the required criteria regarding quality, industry relevance, and employment placement. The structure will be as follows:

1 The framework and guidelines of the SCF described in this document will be refined further and finalized prior to

loan effectivity. All costs and targets shown in this document are indicative. They will be reviewed and updated during project implementation as required.

2 Johanson, R., (2009). A Review of National Training Funds. Employment Policy Primer. World Bank.

Private and public skills providers will submit proposals as per the format and other pre-qualification requirements laid down for the SCF.

The eligible sectors, eligible expenditure, and technical parameters are all provided in subsequent sections of this note.

Bidders would submit proposals against an open and transparent Request for Proposals (RFPs). The RFP will set out the details of the proposal i.e., sectors, number of trainees per sector, geographical distribution, and submission forms.

The Project Appraisal Committee of MSSDS will evaluate and approve the proposals following the procurement process. If the number of proposals exceed the specified number per sector per geographical

zone, allocation of training slots to each service provider can be done on a proportional basis;

If the number of proposals is less than the specified number per sector per geographical zone, allocation of training slots can be done on the basis of the proposals, and fresh proposals can be called after an interval of time;

6. The characteristics of the procurement are: (i) Service provision of an intellectual nature, rather than of works; (ii) Possibly multiple agencies operating in the project jurisdiction. With these characteristics, the procurement would be in accordance with the procedures set out in ADB‟s Guidelines on the Use of Consultants, 2013, as amended from time to time.

I. NEED FOR A SKILLS CHALLENGE FUND IN MEGHALAYA A. Introduction

1. The low employability of India‟s work force is constraining its efforts towards inclusive growth and affecting the competitiveness of its economy.3 Of India‟s total youth population, 57% suffer from some degree of unemployability.4 Graduates and above constitute a mere 7% of the 15 to 60 year-old working age population. 40% of the working age cohort is illiterate. Only 52% of those who pass secondary school enroll for higher education. While 90% of employment opportunities require vocational skills, the education system focuses on rote learning. Surveys show that only 30% of India‟s IT graduates, 25% of engineering graduates, 15% of finance and accounting professionals are suitable for employment.5 2. The Government of India has been emphasizing skills development and reform of secondary education to facilitate faster, sustainable, and more inclusive growth. Two flagship programs launched in 2009, the National Skill Development Mission (NSDM), and the Rashtriya Madhyamik Shiksha Abhiyan (RMSA) or the National Secondary Education Mission, focus on enhancing the employability of India‟s youth (i.e. those aged between 15 to 35 years), develop its human capital, and address concerns about growing inequality. 3. The Asian Development Bank (ADB) Project, “Supporting Human Capital Development in Meghalaya” will support the Government of Meghalaya (GOM) in effectively operationalizing and scaling up these two National Missions to address the growing problems of poverty, inequality, and social stagnation in the state. This report focuses on how the Project will assist GOM in facilitating results-oriented skills development through the innovative modality of a Skills Challenge Fund (SCF). B. Meghalaya State Skill Development Mission

4. Meghalaya is amongst the first states to have set up a detailed institutional structure for operationalizing the state‟s Skill Development Mission in line with NSP, 2009, which mandates decentralization of skills development to the states and facilitation of public–private partnerships (PPPs) in skills development.6 The Meghalaya State Employment Promotion Council (MSEPC) was established in August 2011 to provide policy direction for results-oriented (i.e., employment linked) skills development across the state.7 The Meghalaya State Skill Development Society (MSSDS) was established in December 2011 under the provisions of the Meghalaya Societies Registration Act, 1983, with the authority to receive funds from the government (central and state), and financial institutions, and to spend it for fulfilling the mandate of the MSEPC. GOM

3 Employability broadly refers to a person‟s capacity to gain and maintain productive work over one‟s working life.

4 See India Labour Report, 2007, prepared by TeamLease Services Private Ltd., India. http://www.teamlease.com.

5 „The Emerging Global Labour Market: Part II,‟ 2005; McKinsey Global Institute Report.

6 NSP, 2009, marks a paradigm shift from the traditional central government-led model of skill development and vocational training to one which involves the private sector, and is more decentralized i.e. driven by the states as per their priorities. It emphasizes that skill development should be dynamic, demand-based, and linked to the changing needs of the market. The NSP focuses on outcomes, users‟ choices, competition among training providers, and their accountability. It calls for initiatives which will bridge existing divides between males and females (with the target of raising women‟s participation to at least 30%), rural and urban areas, organized and unorganized sectors, and traditional and contemporary employment.

7 The EPC is headed by the Chief Minister, and comprises relevant Ministers (including Labor, Education, Industries,

Agriculture, and Rural Development). The Executive Council is headed by the Chief Secretary.

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needs to draw on best practice, capacity development support, and external funding to effectively operationalize MSSDS. 5. Like in other states, Meghalaya‟s technical and vocational education (TVET) programs are mainly funded and driven by various central line Ministries including Labor and Employment, Human Resource Development, Rural Development, Tourism, and Tribal Affairs. These programs are run in a compartmentalized manner as per the priorities of the central Ministries, and are not adequately responsive to Meghalaya‟s evolving needs. The linkage of these government-dominated TVET programs with the private sector‟s needs, i.e. the demand side, is usually weak, which affects their quality and relevance. Their poor placement record adds to the stigma associated with TVET. Most TVET programs focus mainly on the urban areas leaving rural Meghalaya, where nearly 80% of the population lives, largely neglected. 6. There is urgent need to provide the GOM with a flexible modality to incentivize private and public providers, and facilitate PPPs for providing a menu of quality skills training for wage employment and self-employment. These include enterprise development options to meet the needs of different segments: rural and urban youth, girls and boys, drop-outs (at various levels) and school graduates, and for those seeking employment within and outside Meghalaya. As elaborated below, the SCF to be established under MSSDS will provide GOM with such a modality. C. Concept of a Challenge Fund 7. A “Challenge Fund” is an effective and versatile financing instrument to channel public money through eligible institutions or service providers for fulfilling specific development objectives. These could include improvement of urban planning and governance, facilitation of pro-poor economic growth, increasing the access of the rural poor to agricultural and financial markets, export promotion, supporting innovations in the field of renewable energy and climate change, or skills development and training. 8. Several countries such as Malaysia, Pakistan, Singapore, South Africa, Brazil and the Philippines have introduced national or state-based skills challenge funds as mechanisms for encouraging flexible training outside of existing mainstream funding arrangements. A review of such funds undertaken by the World Bank found that they serve to: 8

unify various sources of financing for training,

augment the volume of resources for training, and

allocate the funds in accordance with national or state policies and priorities. 9. The World Bank report confirms that pre-employment skills training funds can be effective in building the capacity and improving the quality of national and state training agencies and increasing training provision. Governments in many countries (at least 60) have created training funds to improve the relevance of the technical, vocational, and education training (TVET) to industry. The training funds act as a catalyst for fostering partnerships between training organizations and private enterprises by linking skills trainings to market demand and concrete results in terms of placements and adherence to industry-standards.

8 Johanson, R., (2009). A Review of National Training Funds. Employment Policy Primer. World Bank

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D. Institutional Structure of MSSDS 10. MSSDS has been given the mandate for enhancing the skills development base of Meghalaya by MSEPC which represents the Meghalaya State Skill Development Mission. Details regarding the certificate of incorporation and Memorandum of Association are provided in Annex 2.9 MSSDS can serve to expedite payments to potential service providers seeking financial assistance for skills development thereby, acting as an extended arm of the Department of Finance (DOF), GOM, which is the executing agency (EA) for the Project. Considering the evolving requirements of the SCF, MSSDS would have much more flexibility (through its governing statutes) unlike government departments/entities to form such rules and procedures as it may deem appropriate to comply with General Financial Rules of GOM. 11. The objectives of MSSDS are to: (i) Implement the Meghalaya State Skill Development Mission (MSSDM) and all such

matters incidental to it. (ii) Promote awareness relating to skills development under various government programs

and departments, and channel and strengthen them for better delivery. (iii) Build the capacity of the skills development institutions and empower them to take

responsibility for the skills development process in the state. (iv) Collect, collate, analyze, process, and document all skills development initiatives of the

state. (v) Support and collaborate with various institutions and organizations of the state and

outside it on matters relating to MSSDS. (vi) Monitor the progress of projects and programs taken up from the resources provided to

the Society, and conduct evaluations of these programs and projects according to the time frame and details considered appropriate.

(vii) Receive funds from the government, state and central, and financial institutions towards promotion of its goals and objectives.

(viii) Draw, accept, make, endorse, discount, and negotiate with the Government of India / state government, and other promissory notes, bills of exchange, cheques or other negotiable instruments.

(ix) Invest the fund or the money entrusted to the Society upon such security or in any such manner, as may from time to time, to sell or transpose such investments.

(x) Purchase, take on lease, accept as gift, construct or otherwise, acquire, any loan or property wherever suitable, which may be necessary or useful for the Society.

(xi) Sell, lease, exchange, and other transfer of any portion to the properties of the Society. 12. The Governing Council (GC) of MSSDS comprises the Chief Minister (Chairman), relevant Ministers (Labour and Employment, Education, Industries and Commerce, Community and Rural Development, Agriculture, Cooperation, Information and Technology), Chief Secretary, Additional Chief Secretary (in charge of Labour and Employment), Principal Secretary / Commissioner and Secretary, Labour, and the Chief Executive Officer (CEO) who will also be the Member Secretary. The Executive Council (EC) comprises the Chief Secretary, Additional Chief Secretary (in charge of Labour and Employment), and Principal Secretaries of relevant Departments (Labour and Employment, Education, Industries, Tourism, Community and Rural Development, Agriculture, Cooperation, Information and Technology, and Finance).

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Refer to Annex- 2 for certificate of incorporation and Memorandum of Association of MSSDS.

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13. The GC shall meet at least once in a year to discuss and deliberate upon the activities of MSSDS. The Executive Council (EC) will prepare an inventory of the current government and NGO-run schemes for skills development and plan out how best to implement the strategies laid down by the GC. It will actualize the convergence of human and material resources of different government departments, institutions and agencies that have a direct or indirect mandate to generate employment for the people of Meghalaya. The EC will identify specialized skills training agencies with experience in developing placement-linked skills development opportunities. It will select the Project Implementing Agencies (PIAs) in a competitive and transparent manner to deliver specific skills development outputs and outcomes in a time-bound manner while ensuring quality. The EC will monitor the projects and undertake evaluations as required. 14. MSSDS shall hold an annual general meeting at least once each year. Not more than 15 months will elapse between two successive annual general meetings. MSSDS shall have a separate bank account. All funds of the Society shall be paid into this account. They shall not be withdrawn except on cheques signed by CEO, MSSDS. Cheques exceeding an authorized amount would be signed by both, the CEO, MSSDS, and the Chairman of the Executive Council (i.e. the Chief Secretary). E. Skills Challenge Fund for Meghalaya

15. In view of the above, MSSDS provides a suitable framework for using the SCF modality. Moreover, MSSDS has also been designated as one of the two Project Implementation Units (PIU) under the Asian Development Bank funded Project, “Supporting Human Capital Development in Meghalaya.” 16. The SCF is being established to help catalyze private and public skills development agencies into providing skills training both, for wage and self-employment, in line with the evolving priorities of GOM and the Meghalaya State Skill Development Mission (MSSDM).10 The training will have to be results-oriented, i.e. it should lead to placement within a year of completion of training in the case of training for wage-employment, or help to enhance the livelihood of the self-employed who undergoing training. Given the urgent need to revitalize livelihoods in rural Meghalaya in line with the other ongoing programs of GOM, especially the Integrated Basin Development and Livelihood Promotion Program, agencies specializing in helping the self-employed in accessing credit linkages and setting up enterprises and small businesses will also be supported under the SCF. 17. The SCF will facilitate PPPs to provide a menu of skills training options to meet the needs of different segments: rural and urban youth, girls and boys, drop-outs (at various levels) and school graduates, and for those seeking employment within and outside Meghalaya. It will be used for supporting Mini-missions I, II, III, IV, and VI. GOM will therefore, not remain constrained by the support it receives from various central Ministries (e.g. Labour and

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These priorities will be identified through skills-gap analysis and other assessments to be done by GOM and other

agencies. These include GOM‟s reports on Meghalaya State Skill Development Mission, the Integrated Basin Development and Livelihood Promotion Program, Meghalaya Vision-2030, the study undertaken by the National Skill Development Corporation titled, “Development and Employment Generation Potential of North Eastern States of India,” and findings of household surveys and detailed consultation workshops undertaken during design of the ADB Project. MSSDS will undertake further skills-gap analysis as required, and also monitor the performance and results of the skills training programs so that its future priorities and strategy can be refined.

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Employment, Rural Development, Education, Industries and Commerce etc), but will be able to build on these and effectively operationalize the mandate of MSSDM.

18. A Project Appraisal Committee (PAC) will be constituted in MSSDS, chaired by Member Secretary MSSDS, and other senior members as notified by GOM. Selection of skills training organizations will be through open bids, based on pre-defined managerial, financial, and experiential criteria. The PAC will evaluate and approve the proposals following a transparent procurement process. It will award and sign the contracts with the selected skills training providers. The guidelines and benchmarks laid down under the SCF will ensure that private and public skills development and TVET agencies with experience of providing industry-accredited and demand-linked training leading to placements are selected through a competitive and transparent process. In case specialized and trade-specific inputs are required for evaluating some proposals, the Chief Executive Officer of MSSDS will have the authority to seek advice of external experts on a need basis. 19. The SCF will be open not just for qualified private sector skills training agencies and non-profit non-government training providers but also for public training agencies of Meghalaya including Industrial Training Institutes, which are run by the Department of Labour and Employment, polytechnics run by the Department of Education, as well as those run by other Government departments (e.g. Industries and Commerce, Tourism etc). The public training agencies will also be selected through a competitive process. They will need to assure in their proposals that their training matches the priorities of MSSDS and that it will be results-oriented and in line with the current needs of the market. Partnerships with private sector entities such as Chambers of Commerce, Sector Skills Councils, and / or Industry associations will be encouraged.

11 The Meghalaya Trade Promotion Organization has been set up to provide supporting market infrastructure and

facilitate enterprise development under this flagship program of GOM.

Box: Brief overview of Meghalaya State Skill Development Mission and its Mini-Missions MSSDM is being implemented through six mini-Missions (MMs). Mini-Mission I will focus on the existing schemes of the Ministry of Rural Development and Ministry of Labour and Employment related to placement-linked skills trainings. The youth will be trained in relevant trades through a mix of private and public providers so that they can get productive wage employment inside or outside Meghalaya. Mini-Mission II aims at improving the productivity and entrepreneurial skills of youth who want to be self-employed. Arrangements are made for providing credit linkages to the trained youth by facilitating the formation of Self Help Groups (SHGs) or co-operatives. Mini-Mission III targets skills development of women so that they can also benefit from the job opportunities within and outside Meghalaya. Through awareness building and post-placement support, it will be ensured that women do not remain stuck in “low paying” jobs but are also able to tap their full potential and get fair remuneration. To boost the development of rural areas, GOM launched the Integrated Basin Development and Livelihood Promotion Program in 2011. This Program includes 9 missions to develop the aquaculture, horticulture, livestock, sericulture, tourism, forestry and plantation crops, apiculture, energy, and water sectors. Each mission has identified the need for a cadre of multiple service providers which will be provided under mini-Mission IV of MSSDM.

11 Under mini-Mission V, skills development programs for

potential overseas migrants will be conducted by the Indian Council of Overseas Employment, a registered society of the Ministry of Overseas Indian Affairs. Mini-Mission VI is the visionary component of MSSDM focusing on skills development in emerging areas such as climate change adaptation and green jobs. Skills training in niche areas such as protecting and restoring ecosystems, reducing consumption of energy, minimizing waste and pollution, and promoting use of local environment-friendly material such as bamboo will be piloted under this mini-Mission.

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F. Administrative Arrangements for the SCF 20. GOM, through the Department of Finance (DOF), will be the executing agency. The Department of Education (DOE), and MSSDS/Department of Labor will be the two implementing agencies. The chief secretary, GOM will be chair of the Project Steering Committee (PSC), which will include the additional chief secretary, finance; principal secretary (PS), planning; PS, education; PS, community and rural development; chief executive officer, MSSDS; PS, labor; and secretary, Public Works Department (PWD). The PSC will meet quarterly to monitor progress, approve the project‟s annual budget, and provide overall guidance. The Project Management Unit (PMU) will be headed by the additional chief secretary, finance. It will include all PSC members except the chief secretary, plus the chief engineer, PWD, and director, institutional finance. The commissioner and secretary, finance, will be the deputy project director. The PMU will be responsible for day-to-day coordination, management of project activities, and preparation of progress reports. The project director will be the focal point for issues related to social and environment safeguards. Two project implementation units (PIU) have been established. The first (PIU1) will focus on SHS education, while the second (PIU2) will focus on skills development and TVET reform. 21. GOM has already approved the Project Steering Committee (PSC), Project Management Unit (PMU), the two Project Implementation Units (PIUs), one for managing the Education component and the other for the skills development component, and 11 district project coordination units (DPCUs) through its notifications dated 5 October 2012. The GOM notification lists the composition of the PIU pertaining to MSSDS as well as its overall role. Capacity building technical assistance (TA) will be provided to MSSDS staff through a TA project to be funded from the Japan Fund for Poverty Reduction (JFPR). They will be trained in design and due diligence of proposals, procurement procedures, financial management, and tracking and monitoring the various skills development projects supported by the SCF. The required manuals will be prepared and training imparted so that MSSDS staff are able to manage the SCF activities on their own within 1 to 2 years.

Stakeholders Composition/staffing requirement Roles and Responsibilities

Meghalaya Skill Development Society (MSSDS) Project Implementation Unit-2

Headed by: Chief Executive Officer,

MSSDS Director, C&RD Director, Employment & Craftsmen Training Support staff:

1 Accounting Specialist, 1 Procurement Officer, and 1 Accounts Officer

(i) Assist MSSDS to fulfill its mandate and targets effectively, (ii) establishing and operationalizing the Skills Challenge Fund (SCF) including related due diligence, appraisal of proposals and training providers, and award of contracts, (iii) establishing a state-wide skills database cum labor market information system, (iv) undertaking skills-gap analysis and disseminating timely updates on labor market information to employment exchanges in the state, (iv) mobilizing staff and consultants for smooth implementation of project activities, capacity development, and institutional strengthening, (v) maintaining and updating the system for tracking skilled trainees, and (vi) seeking timely action and decisions from the PSC and PMU as needed.

22. Private and public skills providers will be able to submit proposals as per the format and other pre-qualification requirements laid down for the SCF. Annex-3 provides the indicative guidelines for submitting proposals. Procurement will be under ADB‟s procurement guidelines. Disbursement will be made on the basis of specified training milestones.

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G. Assessment of SCF Quantum12 23. The 12th Five Year Plan of India (2012-2017) has set a target of skilling approximately 80 million (i.e. 8 Crores) additional work force in next five years13. The proportionate target for Meghalaya for next five years is approximately 0.181 million. Year wise break up for the same is presented below:

Year Skilling Target for India ('000)

Skilling target for Meghalaya ('000)

2012-13 8500 20

2013-14 12000 28

2014-15 16000 37

2015-16 20000 45

2016-17 23500 51

Total 80,000 181

24. Based on a review of the NSDC skills-gap report (footnote 9), consultations with key State Government Departments including Department of Labor, Department of Commerce and Industries, Department of Agriculture, Tourism, Sericulture etc., the following key sectors and domains have been identified that have potential for creating employment opportunities within and outside Meghalaya. In addition to above, consultations were also undertaken with various public and private skills training agencies like Shillong Polytechnic (that also runs the community polytechnic), IL&FS, Education, Don Bosco, B-ABLE, Bethany Society etc. Further, focused group discussions (FGDs) with youth and women, and in-depth interactions with the councils of tribal elders (dorbars, nokma and doloi) were held at the village level to validate and triangulate the findings of the skills-gap assessment by mapping the expectations and aspiration of these groups. 25. The sectors identified and the possible areas for skills development within these sectors are summarized in table below:

S. No. Sectors

Primary Sectors

1 Handloom

2 Handicrafts

3 Horticulture

4 Animal Husbandry

5 Mining

Secondary Sector

6 Food Processing

7 Construction

Tertiary Sector

8 Hospitality

9 IT/ITES

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All costs and targets shown in this document are indicative. They will be reviewed and updated during project

implementation. 13

As per 12th Plan document accessed from http://www.skilldevelopment.gov.in/sites/default/files/resources/ Meeting_Social_Welfare_Dept_Northern_States.pdf.

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S. No. Sectors

10 Healthcare

11 Education

12 Small engine/motor/ mobile repair

13 Tourism

14 Beauty and wellness

15 Fashion designing

16 Organized Retail

17 Media and entertainment

18 Computer

19 Call centers

26. The identified domain and skills have been further classified into those for wage employment and those for generating self employment. The options have been grouped into following three categories:

i. Wage Employment module to focus on result based skills development programs that are placement linked for jobs in and outside Meghalaya.

S. No Industry sectors Trades/courses

1. Hospitality Front office, housekeeping, food and beverage, computer operators;

2. IT/ITES Data Entry/DTP, BPO/call centre, customer service and helpline, Hardware maintenance IT system specialization

3. Healthcare Housekeeping staffs in hospitals and clinic, Para health workers, Hospital management

4. Education School teachers, Master Trainers and instructors for vocational courses

5. Tourism Tourist guides, tour operators, trained certified drivers

6. Beauty & Wellness Attendants in beauty salons, hair cutting and styling, dress styling, spa services, salon / spa management, hair and skin specialization

7. Mining Operators for dumpers, loaders and excavators, foremanship, welding, electricians, blasting, drilling

8. Fashion Designing Fashion designing, tailoring

9. Organized Retail Sales activities, customer relationship management, front desk management

10. Media & Entertainment Camera operation, cinematography, editing, pre/post production, music composer, Animation designer, Radio, Jockey, Graphics design etc

11. Automotive Direct sales agents, auto mechanics- 2-4 wheelers, commercial drivers

ii. Self Employment Module 1: Initial start-ups support in the form of equipment, tools and

small term loan (credit linkage) S. No Industry sectors Trades/courses

1. Small engine/motor/mobile repair

Small engine electrical systems Mechanical systems Small engine maintenance and troubleshooting Power tool repair Mobile repair

2. Multipurpose service providers

Carpenters, Plumbers, electricians, electronics repair, para-vets, insurance agents, education counselors etc

3. Beauty & Wellness Hair cutting and styling, skin and hair specialization

4. Construction Masonry, Welding, Machine operating, Electric Works, plumbing etc

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iii. Self Employment Module 2: Cluster based approach requiring forward and backward linkages

S. No Industry sectors Trades/courses

1. Handloom & Sericulture

Reeling, spinning, weaving (Basic & advanced), Designing, Computer Aided Design (CAD), packaging, marketing;

2. Handicrafts Wood crafts, bamboo, and cane crafts;

3. Horticulture Fruits production, processing and marketing, flower production and marketing , spices production and marketing

4. Food Processing Drying and processing of food products, processing of fishery products (Aquaculture), processing of honey (Apiculture), management and entrepreneurial skills

5. Animal Husbandry Piggery- Scientific and hygienic production, processing and marketing

27. The 2011 study undertaken by the National Skill Development Corporation (NSDC) for the North-Eastern region identified the following areas where there is demand for skilled workers within and outside Meghalaya.

Areas for skilling within Meghalaya between 2011 and 2021

Sector Basic Skills Skill Category Level-I Skill Category Level-II Specialised Skill

Handloom Basic weavers working with looms

Weaver with some experience deciding patterns, colours and designs

Entrepreneur managing working capital, overseeing the weaving process, and establishing market linkages

Master weaver, Designer

Handicraft Basket maker,furniture maker, person making different crafts using bamboo, cane and wood

Craftsman with some experience in intricate and complex designs

Entrepreneur managing working capital, overseeing the crafting process, and establishing market linkages

Master craftsperson

Horticulture Fruit, flower and spices grower

Farm extension services provider, Packager

Grower co-operative manager

Marketing manager

Fruit Processing Person involved in drying and processing of food and fruits into jams, jelly, juice, pickles etc.

Distributor, Packager SHG lead executive, Entrepreneur, Agent

Food technologist, Management

Hospitality Housekeeping person cleaning rooms and furnishings

Chefs, Attendants, Computer Operator

Hotel Manager, Entrepreneur

Tourism packagedevelopment planner

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Areas for skilling for migration to other states or overseas

Source: iMACs Skills Gap Analysis 2011 for Meghalaya and other North Eastern States - prepared for NSDC.

Sector Basic Skills Skill Category Level-I Skill Category Level-II Specialised Skill

IT / ITES - Data entry personnel in hotels, hospitals and offices (govt. and private), Call centre: customer service and helpline

IT entrepreneur,hardware maintenance

IT system specialist

Healthcare Helpers and cleanersin hospitals and clinics

Paramedics Nurses and Doctors Specialists

Education - - Teachers, Principals Researcher, Trainer

Motor Repair Mechanics attending basic issues

Mechanics attending complex repair issues

Entrepreneurs running the repair shop

Mining Machine operators like Excavators, Dumpers, Loaders, Fitters, Drivers

People with technical and supervisory skills like Foreman, Welder, Electricians, Blasters, Drillers

Engineers, contractors with skills to make mining plans

Quality control manager

Construction Construction labourer Mason, Welder, Machine operator, Electric Works

Agent, Contractor Project Manager

Forest based / Bamboo

Grower, cutter, collector

Craftsman, bamboo mat and roof maker, packager

Entrepreneurs, Agent Master Craftsman

Sectors/Skills Areas for skilling

Beauty and wellness

Helpers, cleaners in beauty salons, hair cutting and styling, dress styling, spa services, salon / spa manager, hair and skin specialists

Hospitality Housekeeping person cleaning roomsand furnishings, Chefs, Attendants, Hotel Manager, Entrepreneur, Tourism package development planner

IT / ITES Data entry personnel in hotels, hospitals and offices (govt. and private), Call centre: customer service and helpline, IT entrepreneur, hardware maintenance, IT system specialist

Retail services Sales person, customer relationship management, front desk personnel, entrepreneur

Fashion Designing Fashion designers, fashion critic, column writers on fashion, models

Flight attendants Air hostesses and stewards

Ground staff at the airports

Handling of baggage and cargo, aircraft cleaners, ticketing, addressing passenger needs and queries

Healthcare Helpers and cleaners in hospitals and clinics, Paramedics, Nurses and Doctors

Language skills English speaking skills mainly

Trainers Dance, Music and sports trainers

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Human Resource Requirement for Meghalaya, 2011–2021

Source: iMACs Skills Gap Analysis 2011 for Meghalaya and other North Eastern States - prepared for NSDC.

28. Target Number of Trainees for SCF: As mentioned above, as per the 12th five year plan for Meghalaya, the number of youths to be trained in next five years is about 181,000. Considering that a sizeable proportion of the target shall be achieved through implementation of existing central government and state government initiatives for skills development, the Project has set itself a target by providing training to 60,000 youths (or one-third of the overall target) in next five years. Out of the total target of training 60,000 youths, a minimum of 75 percent (or 45,000) will be for wage employment module and balance for self-employment. The year wise and category wise breakup of the above mentioned modules are provided below:

Target number of youth to be trained (2013-2017)

Category 2013 2014 2015 2016 2017 Total

Wage employment Module 5,000 6,800 9,000 11,500 12,700 45,000

Self employment module 1 1,600 1,650 2,250 2,500 3,250 11,250 Self employment Module 2 0 550 750 1,000 1,450 3,750 Total 6,600 9,000 12,000 15,000 17400 60,000

29. Per trainee training cost: The per trainee cost of different vocational training programs being implemented in Meghalaya were analyzed and marked variations were noted between the per trainee cost under MoRD placement linked training program viz. INR 14,100 or US$ 256 14 and Ministry of Youth supported YES scheme viz., INR 29,500 or US$ 536 have been observed.

14

All conversions under this section have been made at 1US$= INR 55.

4,360

2,372

4,319

1,013

14,369

5,050

37,935

5,913

43,319

45,089

211,092

178,231

5,141

3,876

7,324

5,206

18,832

11,088

46,688

29,334

67,017

96,033

271,950

239,528

- 100,000 200,000 300,000

Forest based industry

Food processing

Healthcare

IT/ITES

Handloom

Motor Repair

Education

Hospitality

Mining

Construction

Horticulture

Handicrafts

Year 2021

Year 2011

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In order to determine a realistic costing benchmark, we have taken MoRD cost as the base and have provided a markup of approx 25% to address the higher cost of boarding, lodging and travel in Meghalaya for wage employment training modules viz. INR 17,500 or US$ 318.

30. For self employment modules, a markup of approx 15% for module-1 and 30% for module-2 has been taken on the base training cost of wage employment viz. INR 20,000 or US$ 364 and INR 23,000 or US$ 418 for modules-1 and 2 respectively. An annual increment at the rate of 8% has been added to address increase in cost on account of inflation. Accordingly, the total indicative funding requirement for SCF has been computed in the table below:

Category

Cost / Target15

2013 2014 2015 2016 2017 Total Wage employment Module

Numbers/Target 5,000 6,800 9,000 11,500 12,700 45,000 Rate- cost per trainee 17,500 18,900 20,412 22,045 23,809 Total Cost (in INR Million) 88 129 184 254 302 955.61 Total Cost in USD Million (A) 1.59 2.34 3.34 4.61 5.50 17.37

Self employment Module 1

Numbers/Target 1,600 1,650 2,250 2,500 3,250 11,250

Rate- cost per trainee 20,000 21,600 23,328 25,194 27209

Total Cost (in INR Million) 32 35.64 52.49 62.99 88.43 271.55 Total Cost in USD Million (B) 0.58 0.65 0.95 1.15 1.61 4.94 Self employment Module 2

Numbers/Target 0 550 750 1000 1450 3750 Rate- cost per trainee 23,000 24,840 26,827 28,973 31,291 Total Cost (in Rs Million) 0 13.66 20.12 28.97 45.37 108.13 Total Cost in USD Million (C ) 0 0.25 0.37 0.53 0.82 1.97 Grand Total (In USD Million) (A+B+C) (Exchange rate of $1=Rs. 55)

2.17 3.23 4.66 6.28 7.93 24.28

Grand Total (A+B+C+D) (Exchange rate of $1=Rs. 50)

1.97 2.94 4.24 5.71 7.21 22.07

H. Nature of funding (grant or loan) 31. Considering the economic profile of Meghalaya, a loan-based skills training approach is not practical for achieve the desired impact. Therefore, all disbursements from SCF shall be in the nature of „grants‟ with no repayment requirement. This financial mechanism shall be appropriately ring fenced with adequate covenants in the grant agreements to be signed with the service providers to ensure proper utilization of the grant for the intended purposes. (Refer Annex-5 for model grant agreement). I. Eligible Costs to be supported under SCF 32. The SCF shall not fund:

i. Creation of physical infrastructure and/ or any immovable assets such as land and buildings;

ii. Activities/ projects which are already being funded under existing schemes from central/ state Government;

iii. Projects involving religious or political related activities;

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All costs and targets shown in this document are indicative. They will be reviewed and updated during project

implementation.

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iv. Disaster, humanitarian relief or rehabilitation initiatives; v. Core funding (such as salaries of staff, and general running costs) which are not

directly attributable to the project; vi. Pre-project implementation costs i.e. any costs incurred in preparing the proposal,

including baseline surveys; vii. Depreciation, being a bookkeeping transaction rather than an actual cost; viii. Debt Repayment (loan for skills development obtained from another agency).

33. Proposals would therefore need to be realistic and cost-effective, being focused on:

i. necessary components for carrying out the activities related to skills training only; ii. based on principles of sound financial management; and iii. demonstrate value for money

J. Tax implication of Assistance from SCF

34. The following issues have been considered for understanding the tax implications of the SCF if it is structured as a grant fund:

i. Will MSSDS need to withhold any taxes on these installments under the provisions of Income-tax Act, 1961 (“Act”)?

ii. Will such grant receipts be later taxed in hands of service providers?

iii. What will the service tax implications of grant assistance from MSSDS to the service providers be?

1. Deduction of tax at source on grant installments disbursed by MSSDS to

service providers: 35. TDS implications in the hands of MSSDS would depend upon the nature and character of the receipt in the hands of the service provider. 36. To illustrate:

i. If the services are advisory or technical in nature, there could be an obligation under section 194J of the Income-tax Act, 1961 ("Act") to withhold tax on the disbursement of the grant.

ii. If on the other hand, it is found that disbursement is in the nature of a donation or a voluntary contribution to a charitable trust/ NGO, no TDS liability would arise under normal circumstances.

iii. The fact that MSSDS is government owned and controlled does not have any bearing on its liability to withhold tax under the provisions of the Act.

37. Chapter XVII of the Act deals with withholding of taxes from payments made. Section 194J of the Act provides that any person responsible for paying to a resident any sum by way of royalty shall deduct TDS on the said sum at the time of payment or credit of such sum to the account of the payee, whichever is earlier. The definition of royalty is provided in explanation 2 to section 9(1)(vi) which states that among others, royalty means consideration for the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skills. Since the service providers shall impart technical and industrial skills to Meghalaya‟s youth, the grant provided by MSSDS for imparting such skills qualifies as “royalty”

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under section 9 of the Act and therefore, tax withholding on this payment would be attracted under section 194J of the Act. 38. The fact that consideration (in the form of grant) is being provided to the service providers by MSSDS and not the service recipients shall have no bearing on the applicability of section 194J on such disbursements. Section 194J does not get triggered only when payment is made by the service recipient. The words contained in the section are “any person” and not the service recipient. 39. Reliance in this regard is also placed on Circular 8 of 2009 dated 24 Nov 2009 in this regard. In that circular, CBDT has clarified that payments made by Third Party Administrators (TPAs) to various hospitals on behalf of insurance companies for settlement of medical claims, etc. are liable to tax deduction under section 194J. The circular also states that for invoking the provisions of section 194J, there is no stipulation that professional services have to be necessarily rendered to the person who makes the payment for them. In view of above, tax may need to be deducted @ 10% as per the provisions of section 194J on the grants given by MSSDS to the service providers. 40. The deduction of tax at source would also need to be considered on a case-to-case basis since some of the service providers may have obtained necessary orders from the Assessing Officer for lower or nil deduction of tax at source with respect to payments made to them.

2. Taxability of grants in the hands of service providers 41. The taxation in the hands of service provider, being the recipient of grant, would depend upon the nature and character of the receipt, including nature of the service provider i.e. character of the entity whether it is charity or NGO or a business enterprise. The Hon‟ble Supreme Court (SC) in the case of Sahney Steel v CIT laid down the following principles for determining whether a subsidy is capital or revenue in nature:

i. the character of the subsidy is determined having regard to the purpose for which it is given;

ii. the source of the fund from which subsidy is given is immaterial; iii. the manner in which the subsidy is given is of no consequence; iv. a subsidy given to any person to assist him to set up his business or complete a

project is a capital receipt; v. a subsidy given to an assessee to assist him in carrying on his trade or business is a

revenue receipt; vi. if monies are given only after and conditional upon commencement of production,

such subsidy must be treated as assistance for the purpose of trade or business. 42. In the case at hand, the ultimate purpose for which the grant is being given to the service providers is to impart training to youth of Meghalaya to enhance their skills and employability. Imparting training is the normal occupation of service providers (since the service providers are essentially required to have proven track record in respective field) and therefore, the grant can be considered to assist the service providers in providing their services and would be in the nature of revenue. However, as discussed above, the nature of the service provider would also have a bearing on whether the grant is taxable in the hands of the service provider or not. In case the payment is made by MSSDS to a business enterprise (whether organized in the form of company, firm, etc.), the grant which such enterprise receives in the course of business is a

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regular income which would be chargeable to tax in the hands of these service providers and MSSDS will need to deduct tax at source on the disbursement of grant. 43. If on the contrary, payment is made to NPO / NGO or charitable organization, issue will first arise about the character of the grant in the hands of the service provider. Since these grants are not purely voluntary contributions but a quid-pro-quo payment where the amount is paid commensurate with the services rendered, it shall be a chargeable receipt in their hands. However, this is subject to compliance with the provisions of section 11 of the Act (i.e. at least 85% application of funds for the intended purposes). In view of above, it shall be prudent to assume that the grant received from MSSDS shall be income in the hands of the service providers and net income (after deduction of eligible expenses) shall be subject to taxation in accordance with the tax slab of the service provider and eligibility for tax exemption of the service providers (e.g. 12A registered organizations).

3. Service tax implication on the Grants 44. With effect from July 1, 2012, a negative list approach to taxation of services has been introduced. Under the negative list regime, every service provided in the taxable territory, other than ones listed in the negative list of services or services specifically exempted by way of notification, are subject to service tax. The term 'service' has been defined under section 65B (44) of the Finance Act, 1994 ('the Act'), to mean any activity carried out by a person for another for consideration and has certain specific inclusions and exclusions. Therefore, the condition that 'activity' should be carried out for a 'consideration' is a pre-requisite for a transaction to qualify as service. 45. It may be noted that while the term activity has not been defined in the Act, however, „Taxation of Services: An Education Guide‟ dated 20 June 2012 ('the Education Guide') issued by Central Board of Excise and Customs („CBEC‟) states that the word activity would include an act done, a work done, a deed done, an operation carried out, execution of an act, and provision of a facility. 46. Further, the term 'consideration' has been defined in Explanation (a) to Section 67 of the Act to include any amount that is payable for the taxable services provided or to be provided. Further, the Education Guide provides that since definition of 'consideration' is an inclusive one, it can be inferred that the term „consideration‟ is of wide connotation and would cover everything received in return for a provision of service which includes monetary as well as non-monetary payment. The Education Guide provides that:

“Activity carried out without any consideration like donations, gifts, or free charities are outside the ambit of service;

An act by a charity for consideration would be a service and taxable unless otherwise exempted;

Conditions in a grant stipulating merely proper usage of funds and furnishing of account will not result in making it a provision of service;

Donations to a charitable organization are not consideration unless it is obligated to provide something in return e.g. display or advertise the name of the donor in a specified manner or such that it gives a desired advantage to the donor.”

47. Therefore, from the above discussions from the Education Guide, it is evident that the existence of an „obligation‟ in lieu of consideration is an important condition for a transaction to qualify as service. The grants are given by MSSDS to selected service providers who would

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provide skills trainings to the youth to make them employable. Further, the grant shall be disbursed in installments upon submission of details of utilization of earlier installments and achievement of agreed objectives. 48. Based on the discussions in the Education Guide, it can be inferred that in the instant case, where service providers are required to undertake specific activities prescribed by MSSDS and also furnish details of expenses incurred by them in lieu of the provision of grants to them, the same should qualify as a service and hence, be subject to service tax @ 12.36%. Further, under the negative list regime, services of charitable nature provided by charitable organizations registered under section 12AA of the Income-tax Act, 1961 are included in the exemption list. Also, charitable activities have been defined under the service tax law (Refer Annex 6 for definition of charitable activities). The service tax implication for non-profit entities registered under section 12Aa of the Income-tax Act, 1961 has been summarized below:

If a registered charity is doing any activity falling in the negative list of services or otherwise exempt, it is not required to pay service tax on that activity.

In case the activity is covered explicitly in any of the specified charitable activities at (a) to (d) – refer Annex-6 for description of charitable activities, it is exempt from service tax without any value limit.

For charitable activities mentioned at (e) – refer Annex-6 for description of charitable activities, it is exempt up to a value of twenty five lakh rupees (US$ 47,400) in a financial year if the total value of such services had not exceeded twenty five lakh rupees during the preceding financial year. However, if the activity is not for general public as defined in the notification, it is not eligible for exemption and is required to pay service tax on such activities.

49. Therefore, exemption shall be available only in respect of such charitable activities undertaken by a charitable organizations as have been defined under the notification 25/2012-ST dated 20 June 2012; else such organizations shall also be subject to service tax @12.36%. Considering the nature of activities and services envisaged from the service providers under the SCF mechanism, even 12AA registered organization shall be subject to service tax. As per this assessment, taxes may become payable in the hands of the service providers, unless specific tax exemptions are sought. Given the circumstances that Meghalaya is a special category state and government of India is already passing on ADB loan as 90% grant, it is unlikely that any further tax exemptions would be considered. K. Audit arrangements for SCF 50. Accounting and audit arrangement shall be in accordance with the requirements set out in the Project Administration Manual.

II. OPERATIONAL GUIDELINES FOR SKILLS CHALLENGE FUND A. Application Process for SCF

51. The potential applicants shall be required to obtain copies of the proposal application forms and SCF guidelines from the MSSDS / GOM website. The website shall provide information as regards the following:

Priority occupations for skills development;

Eligible organizations;

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Eligible projects;

Proposal format and submission instructions;

Selection Process;

Contracting arrangements, fund flow and tax implications;

Reporting and monitoring mechanisms;

Grant close out procedures. 52. MSSDS will conduct workshops for all interested groups to generate awareness about SCF, support organizations/agencies making applications, completing application requirements and subsequently assist organizations/agencies with their inquiries on meeting application requirements and in meeting the selection criteria.

1. Eligible Sectors a) Priority occupations for skills development: The proposals should preferably be in the

following priority sectors which would include but not be restricted to the following. All skills training courses will be combined with orientation in the required soft skills as required.

Sector & courses for wage employment: Employment module to focus on results-based skills development programs that are placement linked for jobs within and outside Meghalaya

S. No Industry sectors Trades/courses

1. Hospitality Front office, housekeeping food and beverage, computer operators;

2. IT/ITES Data Entry/DTP, BPO/call centres, customer service and helpline, Hardware maintenance, IT system specialization

3. Healthcare Housekeeping staffs in Hospitals and clinic, Para health workers, Hospital management

4. Education School teachers, Master Trainers, and instructors for vocational courses

5. Tourism Tourist guides, tour operators, trained certified drivers

6. Beauty & Wellness Attendants in beauty salons, hair cutting and styling, dress styling, spa services, salon / spa management hair and skin specialization

7. Mining Operators for dumpers, loaders and excavators, foremanship, welding, electricians, blasting, drilling

8. Organized Retail Sales activities, customer relationship management, front desk management

9. Media & Entertainment

Camera operation, cinematography, editing, pre/post production, music composer, Animation designer, Radio, Jockey, Graphics design etc

10. Automotive Direct sales agents, auto mechanics- 2-4 wheelers, commercial drivers;

Sector & courses for self employment

Self-employment Module 1: Initial start-ups support in the form of equipment, tools and small terms loan (credit linkage)

S. No Industry sectors Trades/courses

1. Small engine/motor/mobile repair

Small engine electrical systems, mechanical systems, small engine maintenance and troubleshooting, power tool repair, mobile repair

2. Multipurpose Carpenters, plumbers, electricians, electronics repair, para-vets,

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S. No Industry sectors Trades/courses

service providers insurance agents, education counselors etc

3. Beauty & Wellness Hair cutting and styling, Skin and hair specialization

4. Construction Masonry Welding Machine operating Electric Works, plumbing etc

Self-employment Module 2: Cluster based approach requiring forward and backward linkages

S. No Industry sectors Trades/courses 1. Handloom &

Sericulture Reeling, spinning, Weaving (Basic & advanced), Designing, Computer Aided Design (CAD), packaging, marketing;

2. Handicrafts Wood crafts, Bamboo and Cane crafts;

3. Horticulture Fruits production, processing and marketing Flower production and marketing , spices production and marketing

4. Food Processing Drying and processing of food products Processing of Fishery products (Aquaculture) Processing of honey (Apiculture) Management and entrepreneurial skills

5. Animal Husbandry Piggery- Scientific and hygienic production, processing and marketing

b) Eligible organizations: The following organizations shall be eligible to seek funding:

Training organizations (private companies, NGOs and Government) that have experience delivering training in the proposed industry sector and are NCVT accredited.

Industry Associations and sector skills councils that have experience delivering training that is NCVT accredited.

International Donor organisations and training providers with experience in developing local capacity to support sustainable job creation through tapping economic opportunities with experience in running similar activities in remote and rural communities and working in post conflict and or insurgency areas.

Firms/Companies that have experience in delivering training that is or is in the process of becoming NCVT accredited.

NGO/private corporate entity/industrial organization associated with National Skill Development Corporation (NSDC).

All of the above organizations need to form a partnership with either a reputable recruitment agency or a company/ companies that intend employing the trained pass outs. Further, eligible organizations will provide information on the legal structure of the organization, on the governance arrangements for the project, and for any partnerships operating as part of the project.

c) Eligible projects: The eligible projects under the SCF may include one or more of the

following or other innovative approaches:

Partnerships between public and private TVET institutions to deliver training partially within the state and/ or outside Meghalaya.

Innovative delivery models to deliver training to students for employment in regional industry.

Partnership with sector skills councils.

Industry body involvement in the development and delivery of training with ITIs, including a segment for the further development of ITI teachers through Train the Trainer programs.

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Pro-poor or gender targeted work based training programs leading to employment either in or outside Meghalaya.

Different skills training models which enhance the skills and income generating capacities of local communities (rather than of individuals) and enhance the economic options available to remote, rural and economically depressed areas.

Applications may be for more than one training program and may be for a number of the same training programs to be delivered sequentially.

General formal work based training programs.

d) Proposal format and submission instructions: All service providers shall submit their proposal applications as per the prescribed format (Refer Annex-3 for proposal submission guidelines). The proposal shall be accompanied with the following documents:

Documents evidencing legal status and registration profile of the entity (s) e.g. Certificate of Incorporation / Registration, duly attested by a Gazetted Officer.

Full details of shareholders, members, and trustees along with documentary evidence supporting the same like register of members and returns submitted with the authorities etc.

Full details of the governing council members / board of directors/ management team looking after day to day affairs of your entity(s) along with documentary evidence supporting the same like register of directors / return submitted with the authorities etc.

Valid tax registrations, service tax registrations, VAT registration certificates and proof of exemptions from any of these taxes and levies, duly attested by a Gazetted Officer.

Address of the registered office, corporate, and branch offices along with documentary evidence like copy of the registration certificate of the company, lease deeds, and property papers etc.

Report on the agency‟s financial capability supported by audited annual statements during the fiscal year 2010-2011, 2011-12, and 2012-2013.

Confirmation certificate in original signed by the head of the applicant entity such as the Managing Director, Chief Executive Officer, or Chairman, confirming compliance with all applicable laws including but not limited to labor laws, environmental laws, tax laws, industrial laws, along with applicable supporting documents.

Copies of minutes and books of the meetings of the governing council, board of directors, trustees, shareholders, and members for the last three years or since inception whichever is later.

Details of all secured and unsecured loans, financial assistance availed by the entity(s) from banks / financial institutions / government institutions along with details of any mortgage, charge, hypothecation and pledge created on any property of the entity(s).

Details and documents pertaining to all major contracts / agreements executed by your entity(s) imposing obligation/ liability and/ or special right on your entity(s) including and not limited to employment contracts with key employees.

Details regarding pending or threatened litigation, quasi-judicial proceedings, notices, and orders etc. (if any) in relation to or in manner affecting the rights of the entity(s) to any movable or immovable asset / liability along with relevant documents.

“Performance Certificate” of proof of implementing skills training program.

Profiles of Faculty members with supporting documents.

A consortium agreement, if applicable, with business registration details and past experience in the proposed area of the consortium partner.

CVs of the project execution team.

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e) Parameters for Assessment of Technical Proposals: The following criteria will be used to evaluate the technical proposals:

The training proposal should be able to document industry support either through evidence of placing graduates and/ or involvement of industry associations or sector skills councils in the design and development of content for the training program.

The training program should have links with any of the sector skills councils established by the National Skill Development Corporation (NSDC).

The employment success (outcomes and placement-record) of previous training programs run by the applicant.

Provision of placement and post placement support strategies.

Evidence of supporting enterprise development for qualified candidates, and the use of an established and proven methodology and set of tools to ensure a quality and consistent outcome.

Quality of the training provision (including identification of possible pathways into further training/education, trainers‟ qualifications and experience, accreditation, resources).

Mainstreaming of gender and social equity concerns.

Ongoing sustainability of the proposed activities and services.

Financial soundness of the proposal.

Commitment to provide and update information on the number of participants who are trained, successfully placed, those who drop out in less than stipulated period, type of post-placement support for a period of 6 months following the end of the training etc. in the format specified by MSSDS.

53. MSSDS will keep all records of the selection process including rejected proposals, approvals, and contracts. These records may be reviewed by the PMU or ADB to improve processes and to ensure transparency in the decision making process. f) Contracting arrangements, Fund Flow and tax implications: The successful candidates

shall be requested to sign a contract with MSSDS in the prescribed format for delivery of the results specified in its proposal application to MSSDS. Refer Annex-5 for the format of the contract. SCF funds will be released in tranches and disbursed to bank account registered in the name of the skills training provider. Funds will be administered and accounted for separately from any other funds currently managed by the service provider to prevent co-mingling of funds.

The disbursement of funds will be triggered by the attainment of specific milestones and outcomes based on those activities identified in the project proposal and contained in the MoU. The indicative milestones are:

Payment Milestone

35% As an advance on signing of the agreement between MSSDS and the skills training provider. Amount would be computed as per the number of trainees envisaged in the approved proposal. Advances would be secured with bank guarantee

20% At the mid-way point of the training program based on actual attendance.

35% Two weeks after completion of the training program based on actual attendance and submission of financial statements as well as M&E reports (e.g. number of students (by sex) who started the program, numbers of students (by sex) who dropped out, numbers for self-employment and wage employment etc).

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Payment Milestone

10% 6 months after the completion of training program, concluding the handholding, additional counseling, or placement support to the trainees. This payment would be based on actual numbers of trainees successfully reaching this stage, submission of pending financial reports along with updated M&E report (indicating placement record), and the successful achievement of all the milestones & outcomes agreed to in the contract.

MSSDS would have the right to check and audit training programs, directly interact with trainees and employers, and audit financial statements of skills training providers (insofar as the specific contracts are concerned).

MSSDS shall, on a quarterly basis, depending on the number of service providers funded under the SCF, submit fund requests to the PMU for disbursement or replenishment of funds under SCF.

MSSDS shall be liable to withhold applicable taxes under section 194J of the Income-tax Act, 1961 from all disbursements made to eligible service providers under the Program. This is however, subject to production of appropriate evidence (order from the Assessing Officer) by the service providers to be eligible for nil deduction or deduction at lower rate. Further, all service providers shall be subject to service tax @12.36%. This is however subject to appropriate notifications from the Central Government exempting the levy of service tax on grant based assistance provided under the Program.

g) Reporting and monitoring mechanism: The skills training providers will be required to submit monthly progress reports to MSSDS (which is also project implementation unit or PIU2 under the ADB project).

MSSDS will track the progress of the projects against the milestones agreed with the service provider in the MoU, and thereafter submit its recommendations for release of next installment of funds to contracted service providers.

The claims made in the progress reports by the service provider shall be correlated with the reports of the District level Project Coordination Units (DPCUs) to monitor the implementation of the skills training projects at the district and block levels. The DPCUs will send monthly progress updates to the PIU which shall review them, along with the project reports provided by the service providers.

B. Reporting & Monitoring

1. Skills Challenge Fund Monitoring System 54. An online SCF monitoring system (SCFMS) will be developed and managed in MSSDS. The SCFMS will be the repository of all the project-related documents like project proposals, details of trainees, monitoring reports (qualitative & quantitative) etc. It will track the progress as per the annual plan and will communicate the variance to respective partners and other concerned stakeholders. It will have access privileges to all the service providers for uploading the data and will also be a one-stop portal for all the skills-related information in Meghalaya. It is strongly encouraged that the skills providers provide all trainee information, including unique numbers and thumb prints. This will ensure proper tracking of the trainees and will help the SCF to validate the number of trainees receiving upskilling, re-skilling or multi-skilling.

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2. Annual Planning Report 55. Once the MOU is signed, the service providers will be requested to submit an annual plan for training and placement. This annual plan will be broken down month wise so that monthly tracking of the variance is tracked and managed. The annual plan has to be vetted and signed off by MSSDS. Subsequently, all achievements and monitoring will have reference to the annual plan. It is expected that as the project is implemented, the targets will be revised. There has to be some provision for such revisions. It is suggested that the annual plans can be revised (if required) at the half-yearly stage, considering the existing ground realities. However, this has to be approved at the PMU level. The template for the annual planning is provided in Annex 8.

3. Monthly Reporting 56. In order to track the annual plan, a monthly reporting format shall be deployed. The monthly reporting format will provide information pertaining to month-wise achievement of the target. It will also have a component of placement detail of all the trainees successfully completing the course. The monthly reporting format will be uploaded on the MSSDS website for ready reference. 57. The monthly reporting format has to be uploaded on the MSSDS website within the first week of the month. The PIU will conduct independent validation of the information provided in the monthly reporting format. The monthly reporting format is provided as part of Annex 8 (annual plan with monthly breakdown). The template for reporting the placement of trainees is provided in Annex 9.

4. Monthly meeting at the DPCU Level 58. The role of the DPCU is to track the project progress at the district level. The monthly meeting at the PIU level would be attended by representatives or the centre in-charge from the service provider. The purpose of the meeting is to discuss the progress and any other issue related to project implantation that requires attention of the MSSDS/PMU or PIU.

5. Utilization Certificate

59. At the end of each fiscal year the service provider have to provide the audited utilization certificate. The utilization certificate should clearly highlight the fund received and the fund utilized. It should also mention the different components for which the funds were utilized.

6. Grant close out procedures 60. Under the SCF arrangement, applicants can apply to run multiple training programs, and if appropriate, in a range of industry sectors. The timeline for the final reporting is three months after the activity is finished. Activity Progress Reports to the MSSDS must be provided as per the timelines agreed in the MoU. The employer satisfaction follow up survey results will be required before final payment. 61. The service providers shall be required to submit audited utilization reports to MSSDS. Along with the final audited report (at the end of the agreement), successful applicants will sign an affidavit stating that there has been no inclusion of targets or funds from other sources. Applicants must list other funding they are receiving from the NSDC, the Ministry of Labor and Employment, any other Government or non-government organization. They must also list any

23

associated training targets to ensure double dipping does not occur. This information will be shared with other funding bodies for confirmation. The service provider shall also be required to maintain thumb impressions of the candidates post successful completion of the training course to keep track re-skilling, multi-skilling and upskilling of youth. This information will be posted on the SCF website in an appropriate manner by MSSDS. C. Outreach mechanisms 62. In order to effectively reach-out and disseminate information on the SCF within and outside Meghalaya, a multi-dimensional outreach campaign strategy would be required. Some of the possible means that could be used by the MSSDS have been provided below: D. Print & Multi-media Medium

Brochures;

Advertisement in leading national and regional newspapers;

Advertisements in leading development journals and newsletters

Mailing list from the database of potential skills development societies/institutes/firms

Advertisements through local radio channels

Using NSDC, NCVT, DGE&T to disseminate information to the sector skills councils and the private skills trainers.

E. Electronic Medium

Creating a website on the MSSDS page

A link for the SCF should also be provided on other government websites

F. Direct program reach-out through workshops

Directly publicize the SCF through the medium of workshops at the State and District level. The ADB will provide support for awareness and mobilization effort across Meghalaya.

63. Proposals for joint funding will be considered with one partner being the lead agency and both partners signing a mutual consortium funding agreement. Projects need to have clear management roles and systems to account for how the funds will be used. Approved proposals will be monitored and evaluated by the MSSDS. Funding can be stopped at any time during the project due to ongoing non-compliance with the Funding Agreement or for not meeting the milestone and outcome targets.

24 Annex 1

CERTIFICATE OF INCORPORATION AND MEMORANDUM OF ASSOCIATION OF MSSDS

Annex 2 25

PROPOSAL SUBMISSION GUIDELINES

The Proposal Submission Guidelines have been divided into two sections:

SECTION 1: Technical Proposal Development Guidelines

SECTION 2: Financial Proposal Development Guidelines

SECTION 1: TECHNICAL PROPOSAL FORMAT & GUIDELINES

Part A: Cover Page & Proposal Summary

COVER PAGE

Details of the Organization: Name: Address: Telephone No: Fax No.: Email: Principal Contact Officer:

Industry Sector:

Skills Area:

Proposed Curriculum/ Course:

Region/ Location (Within Meghalaya/ Other State):

Note: All organizations must attach the following information where available:

Documents evidencing legal existence of your entity (s) e.g. Certificate of Incorporation / Registration, duly attested by a Gazetted Officer;

Full details of shareholders/ members/ trustees along with documentary evidence supporting the same like register of members / returns submitted with the authorities etc

Full details of the governing council members/board of directors/management team looking after day to day affairs of your entity(s) along with documentary evidence supporting the same like register of directors / return submitted with the authorities etc

Valid tax clearance certificates, service tax certificates, VAT registration certificates and any other registration certificates duly attested by a Gazetted Officer.

Address of the registered office/ corporate/ branch offices along with documentary evidence like copy of the registration certificate of the company, lease deeds, property papers etc

Report on the Agency’s financial capability supported by Audited Annual Statement during the Financial Year 2010-2011, 2011-12, and 2012-2013.

Confirmation certificate in original signed by the head of the applicant entity such as Managing Director/ Chief Executive Officer/ Chairman confirming compliance with all applicable laws including but not limited to labor laws, environmental laws, tax laws, industrial laws, along with applicable supporting documents.

26 Annex 2

Copies of minutes books of the meetings of the governing council / board of directors/ trustees/ shareholders/ members for the last three years or since inception whichever is later

Details of all secured and unsecured loans / financial assistance availed by your entity(s) from banks / financial institutions / government institutions along with details of any mortgage, charge, hypothecation and pledge created on any property of your entity(s)

Details and documents pertaining to all major contracts / agreements executed by your entity(s) imposing obligation/ liability and/ or special right on your entity(s) including and not limited to employment contracts with key employees.

Details regarding pending or threatened litigation / quasi judicial proceedings, notices / orders etc. (if any) in relation to or in manner affecting the rights of your entity (s) to any movable / immovable asset / liability along with relevant documents

“Performance Certificate” of proof of implementing Employable Skills Programs for a minimum of XXX participants preferably in Meghalaya;

Profiles of training staff with supporting documents

A consortium agreement, if applicable, with business registration details and past experience in the proposed area of the consortium partner

CV’s of project execution team

PROPOSAL SUMMARY

Brief Proposal Outline (highlighting the sector and trades/course and number of courses in which trainings shall be imparted) Proposed student numbers: Main inputs: Main outputs (employment numbers, local entrepreneurship development income generating activity numbers): Placement and Post Placement support strategy:

Financial Applicant Funds and Contributions: Budget amount: Expected Start Date: Expected Finish Date:

Has MSSDS or another government agency previously funded this activity? Yes / No

If so, have the funds been acquitted? YES / NO When? / /

If previously funded by the Government of Meghalaya or the MSSDS, has a report been submitted as required to the relevant Government Agency? Yes / No. When? / /

Annex 2 27

Declaration of Intent I (authorized officer)______________________________________, (Position in Organization) submit this application and undertake that all funds provided would be expended for the purposes for which they are provided. Signature: _________________________________________ Date: Contact Details Telephone: __________________________________ Email: ________________________________________ Part B: Technical Proposal Format B.1. Introduction Briefly describe the project. List the skill shortages that will be addressed under this proposal. In this section, please summarize how the activity supports an identified industry skill need and how many students will be trained and placed in wage employment or local entrepreneurship development and associated income generating activities.

B.2. Organizational context Briefly describe similar previous projects implemented by the organization identifying the target industry sector and how their needs were met. Outline how the partners will work together. A list of those involved must be included in this application along with evidence of their support.

B.3 History of employment placement success (for organisations applying to conduct vocational skills training) Please list any statistics on employment outcomes for similar projects and indicate how long after the placement did the follow up occur. The Project Implementation Team may ask for the names and contact details of employers to verify the information.

B.4 History of income generating success (for applicants intending to conduct local entrepreneurship development and associated income generating activities) Please list any statistics on local entrepreneur‟s success at repaying credit in similar projects run by the applicant and indicate how many income generating activities have continued to

28 Annex 2

operate under previous projects. MSSDS may ask for the names and contact details of entrepreneurs to verify the information.

B.5 Project Details vocational skills development (for local entrepreneurship development and associated income generating activities go to B.6) B.5.1 What training course or curriculum will be used to deliver the skills?

B.5.2. What quality benchmarks does it met, i.e. NCVT/ DG&ET recognized/ accredited, MSSDS recognized, Sector Skills Council, Industry certification, etc. Teacher qualifications and experience

B.5.3. Identify in detail how each subject/ class/ topic meets the identified skill shortage.

subject/ class/ topic Skills required to perform job

B.5.4. Industry Support. Please list the support shown by companies and/ or industry associations for this proposal. Please attach hard copies of letters of support or other forms of evidence that demonstrate support for the applicant to undertake the project.

B.5.5. Please detail the placement arrangements that will be used to place the students in safe non-exploitative work.

Annex 2 29

B.5.6. If the organization intends to use a placement company please provide their name and contact details and any registration details. B.5.7. Please detail the post placement support that will be provided to the students once they have gained employment. B.5.8. Please describe the gender and equity approach and support provided by the project. B.5.9. Location of the project. Where will the training be located? Describe where the activity will be located and the accommodation if it is located outside of Meghalaya.

B.6 Project Details local entrepreneurship development and associated income generating activities B.6.1 Please outline the process to undertake the local demand and competitiveness assessments for identifying potential wage and income generating activities and related training needs

B.6.2. Please detail your methodology to undertake a detailed analysis to identify key constraints hindering the growth of the agreed priority sectors in the state and identify strategies to overcome these including multi-tiered value chain based market development approaches and market based solutions

B.6.3. Identify pre and post training support activities to optimise the success of local entrepreneurs and employers, including strategies linking with credit

30 Annex 2

B.6.4. Detail previous experience in identifying potential wage and income generating activities and designing training content based on these needs.

B.6.5. Provide details of the proposed integrated training and support for existing businesses looking to expand B.6.6. Please detail previous experience in working with local communities to develop income generation activities and local employment growth. B.6.7. Please describe the gender and equity approach and support provided by the project. B.7. Project timeline

B.7.1. Activity schedule. Please attach a proposed timetable or work plan of activities, outputs and outcomes to be undertaken and completed. Not more than two pages.

Annex 2 31

SECTION 2: FINANCIAL PROPOSAL FORMAT & GUIDELINES

Financial details

Inputs and Costs. Summarize the inputs (people, materials, training etc.) required for each component/task listed in B.7.1 and their costs listed in the budget. Attach no more than two pages

Expected Benefits and Risks. List, and quantify, if possible, the expected benefits. Include benefits to specific social groups, such as women. Discuss the appropriateness of the activities at the social, economic and local skills level. Consider any risks that might affect the success of the activities and what would be done in such situations.

Sustainability. Describe how the project will be sustained when SCF funding ends. Monitoring

Monitoring and Management Briefly describe how the organization intends to monitor this project to ensure it achieves the objectives you have set. The project will require the performance of the project and financial accountability to be monitored. You should also identify the performance indicators you will use to monitor the projects achievement against its stated outputs and outcomes. Results from the employer satisfaction follow up surveys will be required before final payment. In this section you must show how you will report to the PAC, the progress of your project in achieving your outputs and outcomes.

Budget Clearly indicate the contributions from the SCF, other donors, and government agencies, participants (employers and industry bodies). STANDARD BUDGET FORMAT

Sl. No

Particulars Total

Numbers Unit Price

SCF

Other Donors/

Government

Other Student

fees

1 Proposal Personnel

1.a Name/position/function/time dedicated to the project

1.b Trainer Costs

1.c Placement Costs

1.d Travel Costs

1.e Support Costs

1.f Training costs

1.g Scholarship costs

1.f Other (specify)

2 Non-Personnel Inputs

2.a Materials, Freight, Commodity, Insurance Inputs, (attach a separate list of assets)

2.b Printing and Publications Costs

2.c Learning Resources Development

2.d Translation services

32 Annex 2

Sl. No

Particulars Total

Numbers Unit Price

SCF

Other Donors/

Government

Other Student

fees

2.e Other (specify)

2.f

3 Interstate Support Costs

3.a Training accommodation

3.b Student accommodation

3.c Student Transport Costs

3.d Student meals

3.e Other (specify)

TOTAL

Personnel costs Personnel are staff required to implement the project. Non-personnel costs Direct activity inputs, e.g. materials, training and workshop costs. Interstate support costs Expenses required to support students living interstate while undertaking the training program. Signatures Applicant: Name :.…………………………………….. Position:………………………………………Signature …………………………………… Partner Organization Representative (Employers/Industry Organizations – Add additional signatures where required) Name : ………………………………….. Position : …………………………………..Signature : …………………………………..

Annex 3 33

PROPOSAL APPRAISAL GUIDELINES The Project Evaluation Unit (PAC) members would be required to fill the following assessment forms:

Form 1: Proposal Assessment Cover Sheet

Form 2: Application Assessment Form

Form 3: Ranking Assessment Summary

FORM No. 1: PROPOSAL ASSESSMENT COVER- SHEET

Proposal Number

Submitting organization name:

Industry Sector:

Skills area:

Location:

Gender / Equity Relevance:

Sustainability:

Total Score:

Recommended for funding Yes No Selection committee member

NAME: SIGNATURE: ______________________________________ __________________________________ DATE: / /

34 Annex 3

FORM No.2: Application Assessment form

(To be completed by each member of the PAC) This form is to be filled out by each member of PAC for the purpose of approving applications. Proposal : [Insert the Name of the Project] Name of the Agency: [Insert the Name of the Agency] Skill Shortage : [Insert industry skill shortage]

Section 1: Criteria for assessment of proposal for funding through the SCF for placement linked training

Sl. No Particulars Yes No

1. Industry linkages and skill shortages

1.a Employer role clearly defined and employer satisfaction survey has been considered

1.b Evidence of employer support for the project and commitment to employing students

1.c The training is clearly linked to an identified skill shortage

1.d The relevant Sector Skills Council/ industry association recognizes the training program/ curriculum

1.e Evidence of a history of applicant involvement in the industry sector

Sub-total: (Allocate TWO points for each Yes)

2. Placement and Post Placement Support

2.a The application has placement and post placement support strategies

2.b The placement is done by someone other than the trainer

2.c The placement is done by the training organization

2.d The proposal includes an induction component explaining what the workplace will be like and what it will be like in another state

2.e Provides details of any third party involved in the placement of students

Sub-total: (Allocate TWO points for each Yes)

3. Quality of training

3.a The application documents in detail how and where the training program meets the identified skills shortage

Annex 3 35

Sl. No Particulars Yes No

3.b Proposes quality training resources

3.c Uses accredited training programs or programs that are recognized by a relevant authority

3.d The training staff have qualifications in training/ teaching

3.e Offers the option of possible pathways into further training/education

Sub-total: (Allocate TWO points for each Yes)

4. Gender and Equity Group Considerations

4.a The main organization has a history of gender or equity programs

4.b The organization has gender and equity policies and/ or a gender and equity mandate

4.c Identifies permanent mechanisms for the involvement of different access and equality groups to be encouraged to participate in skills development

4.d Provides innovative modes of delivery that support improved access opportunities for rural and remote groups

4.e Includes social marketing activities that actively encourage access and equity groups to participate in skills development training

Sub-total: (Allocate TWO points for each Yes)

5. Sustainability Considerations

5.a The organization is recognized by MSSDS/NCVT

5.b The organization has identified an on-going sustainability strategy

5.c The organization is establishing a branch/ branches in Meghalaya

5.d The application includes on-going placement viability once the project funding ceases

5.e The application demonstrates that quality and profile considerations support a competitive approach to on-going skills development in or with Meghalaya

Sub-total: (Allocate TWO points for each Yes)

TOTAL

………/50

36 Annex 3

Criteria for assessment of proposal for funding through the SCF for local entrepreneurship development and associated income generating activities

Sl. No Particulars Yes No

1. Industry linkages and skill shortages

1.a Propose undertaking a local demand and competitiveness assessments for identifying potential wage and income generating activities and related training needs

1.b Undertaking an analysis to identify key constraints hindering the growth priority sectors in the state

1.c The training is clearly linked to an identified skill shortage and strategies to overcome constraints in the priority sectors

1.d Looking at a multi-tiered value chain based market development approach and identifying market based solutions

1.e Has a history of entrepreneurs coming through their projects who successfully repaying their credit

Sub-total: (Allocate TWO points for each Yes)

2. Pre and post local development support

2.a Pre and post training support activities to optimise the success of local entrepreneurs and employers

2.b Provides a strategy for accessing credit

2.c Identifies potential wage and income generating activities and designs customised training content based on these needs

2.d Offers integrated training and support to existing businesses looking to expand

2.e Provides details of any third party involved in providing credit

Sub-total: (Allocate TWO points for each Yes)

3. Quality of project

3.a The application documents use an established and proven methodology and set of tools to ensure a quality and consistent outcome.

3.b Proposes quality training resources

3.c Uses local level analyses to ensure viability of possible income generation and employment strategies

Annex 3 37

Sl. No Particulars Yes No

3.d The proposed staff have experience in working with local communities to develop income generation activities and local employment growth

3.e The applicant have a successful track record in enhancing the economic options available to remote, rural and economically depressed areas

Sub-total: (Allocate TWO points for each Yes)

4. Gender and Equity Group Considerations

4.a The main organization has a history of gender or equity programs

4.b The organization has gender and equity policies and/ or a gender and equity mandate

4.c Identifies permanent mechanisms for the involvement of different access and equality groups to participate

4.d Provides innovative modes of delivery that support improved access opportunities for rural and remote groups

4.e Includes social marketing activities that actively encourage access and equity groups to participate

Sub-total: (Allocate TWO points for each Yes)

5. Sustainability Considerations

5.a The organization has a history of facilitating income generating activities and employment generation in local communities

5.b The organization has identified an on-going sustainability strategy

5.c The organization is establishing a branch/ branches in Meghalaya

5.d The application includes on-going local processes once the project funding ceases

5.e The application demonstrates a quality approach to employment generation in Meghalaya

Sub-total: (Allocate TWO points for each Yes)

TOTAL

………/50

38 Annex 3

Particulars Yes No

Financial information is complete and thorough

Legal entity information is complete

Section 2: General comments on the proposal taking into account overall quality, relevance and the degree in which the activities proposed will contribute to strengthening skills development and employment of youth: Please make any additional comments here about the Proposal:

Section 3: Other information required to be supplied to support approval for funding Should a PAC Member seek further detail or a slight modification of an application, please identify what is required. The PIU can then request the information or modification from the applicant to support your assessment of the proposal. List additional information required on this Proposal:

Section 4: Bona fides of applicant organization

Particulars Yes/No Has the organization previously received Government funding? Have these previous funds provided by Government been properly acquitted?

If the organization has not received Government funds previously it is required to submit the following documents with this application:

A copy of the organization‟s constitution or articles of association.

An audited annual financial statement certified by a public accountant who is not a member of the organization.

A copy of the organization‟s annual report, or a similar document.

An outline of its business plan or strategic plan.

Section 5: PAC member NAME: SIGNATURE:

Annex 3 39

______________________________________ __________________________________ DATE: / / Section 6: Should this proposal be approved for funding? YES / NO / Pending additional information (Please Circle)

40 Annex 3

FORM No. 3: RANKING ASSESSMENT SUMMARY

(To be completed by each member of the PAC) PAC members are required to fill out this ranking assessment form with recommended proposals listed in order of priority. A separate covering form for each proposal is also required. PAC RECOMMENDATIONS IN PRIORITY ORDER: (Implementing Agency, Skills Sector) 1._______________________________________________________________________ 2.________________________________________________________________________ 3.________________________________________________________________________ 4.________________________________________________________________________ 5.________________________________________________________________________ 6.________________________________________________________________________ 7.________________________________________________________________________ 8.________________________________________________________________________ 9.________________________________________________________________________

Annex 4 41

DRAFT AGREEMENT BETWEEN MSSDS AND SKILLS TRAINING PROVIDER

AGREEMENT

BETWEEN Meghalaya State Skill Development Society, registered under the Societies Registration Act 1983 and having its registered office/operations office at XXXX, Shillong, Meghalaya (hereinafter referred as „MSSDS‟ or „Client', which expression shall unless it is repugnant to the context or meaning thereof be deemed to mean and include it successors, permitted assigns and affiliates) of the First Part: AND {Insert Organization Name}, (hereinafter referred to as „{Insert Organization Name}‟ or „Service Provider‟ or „Proposer‟ which expression shall, unless it be repugnant to context or meaning thereof, be deemed to mean and include its successors, permitted assigns and affiliates); WHEREAS: Meghalaya State Skill Development Society, (the “Client”) has issued a Request for Proposal dated (XXX) (the “RFP”) for the “XXXX” (the “Project”). Pursuant to the RFP evaluation process the Project has been awarded to {INSERT ORGANISATION NAME} by the Client for INR XXXXX/- (insert amount in words). NOW THIS AGREEMENT WITNESSESS AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS 1. Scope of Activities 1.1 The Project shall be implemented by the {INSERT ORGANISATION NAME} in accordance

with the Project Implementation Plan set out in Annex A, within the geographical area specified therein.

1.2 No variation in the Project Implementation Plan shall be valid or binding unless expressly agreed to in writing by the {INSERT ORGANISATION NAME} and the MSSDS in the form of an Amendment. Each Amendment shall be allotted a distinctive number.

1.3 MSSDS shall not provide any funds in respect of work done outside the Project Implementation Plan and takes no responsibilities whatsoever for such work.

1.4 The {INSERT ORGANISATION NAME} shall carry out the activities set out in Annex A - Project Implementation Plan with due diligence, efficiency and with due regard to the judicious use of funds

2. Payment for Services and Expenses 2.1 MSSDS shall make payment to the Proposer as per the terms of payment as defined in

Annex B. 2.2 The Service Provider‟s request(s) for payment shall be made to MSSDS in writing,

accompanied by a utilization report describing, as appropriate, the activities undertaken.

42 Annex 4

The Service Provider will define the activities performed and substantiate with documents the fulfillment of obligations as stipulated in the Contract.

2.3 Payments shall be made promptly by MSSDS after submission of the utilization report or

claim by the Service Provider and upon verification and certification by the concerned official. In case the MSSDS representative is not satisfied with the quality of activities delivered and the detailing of work of the Service provider, he/ she shall return the invoice advising needful changes or improvement in the quality of delivery or the additional incomplete work which is expected to be delivered by the Service Provider. The decision of the MSSDS representative shall be final and binding. In such cases, the Service Provider and the MSSDS representative shall within a week sign‐off a mutually agreed

date for completing of the desired Service and resubmission of the invoice. 2.4 Payments shall be made in Indian Rupees/ INR. 2.5 For all activities undertaken, the Proposer shall be entirely responsible for all taxes, duties,

license fees, etc., incurred until delivery of the contracted products or services to the Client. If any rates of Tax are increased or decreased, a new Tax is introduced, an existing Tax is abolished, or any change in interpretation or application of any Tax occurs in the course of the performance of Contract, which was or will be assessed on the Proposer or its employees in connection with performance of the Contract, an adjustment as per the terms of this contract shall be applicable and Contract Price shall be made to take into account any such change in such manner as prescribed herein the contract.

3. Responsibilities. 3.1 In connection with {INSERT ORGANISATION NAME}‟s Activities and development of

Deliverables, Client shall perform those tasks and fulfill those responsibilities specified in the applicable Appendix A (“Client Responsibilities”). Client understands that {INSERT ORGANISATION NAME}‟s performance is dependent on Client‟s timely and effective performance of Client Responsibilities under this Agreement and timely decisions and approvals by Client. Unless an Appendix contains specific acceptance provisions, all Activities and Deliverables submitted to Client for approval shall be deemed accepted if, within ten (10) days after delivery, Client has not provided to {INSERT ORGANISATION NAME} written notice identifying specifically any basis for not approving the Activities or Deliverables. {INSERT ORGANISATION NAME} shall be entitled to rely on all decisions and approvals of the Client in connection with the Activities or Deliverables. Changes in decisions and approvals are subject to Section 1.2. {INSERT ORGANISATION NAME} shall not be held responsible for any delay caused in adhering to the time schedule set forth in a relevant Appendix, which may result due to non-performance of the Client Responsibilities by the Client. {INSERT ORGANISATION NAME} shall be entitled to rely and shall be fully protected in relying and acting upon any instructions given by the designated authorised representative of the Client.

4. Equipment. 4.1 Any non-consumable items of equipment purchased under the support from MSSDS

with a useful life of more than one year shall remain the property of MSSDS. Equipment procured under the SCF fund will be used for placement linked skills development purposes. If after all possible support strategies have been explored, the training associated with the equipment is not resulting in the placement of students, the MSSDS

Annex 4 43

can reassign the equipment to another training provider to provide placement link skills development training.

5. Confidential Information. 5.1 The Client MSSDS (“the Disclosing Party”) and the Service Provider/ Proposer (“the

Receiving Party”) shall keep confidential and shall not, without the written consent of the other Party hereto, divulge to any third Party any documents, data or other information furnished directly or indirectly by the other Party hereto in connection with the Contract (Confidential Information), whether such information has been furnished prior to, during or following termination of the Contract. Nothing under the Agreement shall prevent the Client from sharing the deliverables or reports prepared by the Proposer under the Agreement with any third party, provided, the Client agrees do the same at its own risk and responsibility The Client shall not, without the Proposer‟s prior written consent, use any Confidential Information received from the Proposer for any purpose other than the operation and maintenance of the project. Similarly, the Proposer shall not, without the Client‟s prior written consent, use any Confidential Information received from the Client for any purpose other than those that are required for the performance of the Contract.

6. Indemnification. 6.1 The Proposer hereby represents and warrants that (i) the Services/Products as supplied,

installed, tested and accepted; (ii) use of the Services/Products in accordance with the Contract; and (iii) copying of the Software and Documentation provided to the Client in accordance with the Contract do not and will not infringe any Intellectual Property Rights held by any third party and that it has all necessary rights or at its sole expense shall have secured in writing all transfers of rights and other consents necessary to make the assignments, licenses, and other transfers of Intellectual Property Rights and the warranties set forth in the Contract, and for the Client to own or exercise all Intellectual Property Rights as provided in the Contract. Without limitation, the Proposer shall secure all necessary written agreements, consents, and transfers of rights from its employees and other persons or entities whose services are used for Project execution.

7. Employees; Relationship of the Parties. 7.1 {INSERT ORGANISATION NAME} reserves the right to change which personnel shall

be assigned to perform Services, and to replace or reassign such personnel during the term of this Agreement. However, subject to written approval of MSSDS to scheduling and staffing considerations, {INSERT ORGANISATION NAME} will attempt to honor Client‟s request for specific individuals. Any approved changes to teacher/ trainer personnel will oblige the new personnel to have the required qualifications in teaching and/ or training.

8. Limitation of Liability. 8.1 In case the actual placement and retention of trainees in employment falls short of the

stipulated level as agreed to between the parties to this agreement, an amount equal to 15% of the cost per trainee agreed to be paid by MSSDS to {INSERT ORGANISATION

44 Annex 4

NAME}, for each trainee not so placed under employment and retained for a minimum duration of XX months, shall be withheld by MSSDS from the final installment due to INSERT ORGANISATION NAME}. No further payments shall be released by MSSDS to INSERT ORGANISATION NAME}, unless it has produced evidence to the satisfaction of MSSDS of the claims made in its progress reports. In the case where the {INSERT ORGANISATION NAME} can demonstrate that they have exhausted all reasonable attempts to place trainees, the MSSDS may waiver the liability.

8.2 The aggregate liability of the Service Provider to the Client, whether under the Contract,

in tort or otherwise, shall not exceed the Contract Price, provided that this limitation shall not apply to any obligation of the Proposer to indemnify the Client with respect to infringement of copyright or trade secrets and any indemnity for bodily injury or property damage which is directly caused due to negligent act or willful misconduct.

8.3 The allocations of liability in this Section 8 represent the agreed and bargained-for

understanding of the parties and {INSERT ORGANISATION NAME}‟s compensation for the Services reflects such allocations.

9. Termination. 9.1 Either party may, upon giving thirty (30) days written notice identifying specifically the

basis for such notice, terminate the applicable Appendix (and not any other Appendix) for breach of a material term or condition of the applicable Appendix unless the party receiving the notice cures such breach within the thirty (30) day period.

9.2 Upon termination under this Section 9, Client shall pay {INSERT ORGANISATION

NAME} for all Services rendered, including a pro rata portion for Deliverables in progress, and expenses incurred by {INSERT ORGANISATION NAME} prior to the date of termination. Upon termination by {INSERT ORGANISATION NAME} under Section 9, Client shall also pay {INSERT ORGANISATION NAME} for any out-of-pocket demobilization or other direct costs resulting from such early termination.

9.3 All provisions of this Agreement which are by their nature intended to survive the

expiration or termination of this Agreement shall survive such expiration or termination. 10. Dispute Resolution 10.1 Any controversy or claim arising out of or relating to this project and the services to be

rendered by Service Provider under or pursuant to this project Agreement, the interpretation hereof, or its breach shall, if not resolved by mutual discussions between the parties, be settled by binding arbitration in accordance with the Arbitration and Conciliation Act, 1996. Arbitration shall be conducted in Shillong in English language.

10.2 The parties shall be entitled to engage in reasonable discovery, including requests for

production of relevant non-privileged documents. It is the parties‟ intent that the discovery proceedings be conducted in a cost-effective manner.

10.3 All decisions, rulings, and awards of the arbitral panel shall be in accordance with the

applicable law, shall be in writing, and shall state the reasons upon which it is based. The arbitrators shall have no power to modify or abridge the terms of this Agreement, including, but not limited to, Section 9. The award of the arbitrators shall be final and

Annex 4 45

binding, and enforcement of the award may be done by any court having jurisdiction to do so.

10.4 Costs incurred in the arbitration proceeding, including attorneys‟ fees and expenses,

shall be borne in the manner determined by the arbitral panel. 10.5 All disputes and controversies between MSSDS and the Service Provider shall be

subject to the exclusive jurisdiction of the Courts at Shillong the parties agree to submit themselves to the jurisdiction of such court. This Project agreement shall be governed by the laws of India.

11. Complete Agreement; Miscellaneous

11.1 This Agreement, and any applicable Appendices, set forth the complete and exclusive understanding between the parties and supersedes all prior agreements, conditions, warranties, representations, arrangements and communications, whether oral or written, with respect to the subject matter of this Agreement whether with or by {INSERT ORGANISATION NAME}, any of its affiliates, or any of their employee, officers, directors, agents or shareholders. Neither this Agreement nor any Appendix may be modified or amended except by the mutual written agreement of the parties. Any purchase order issued by the Client shall be for its administrative purposes only and none of its terms and conditions shall be of any force or effect against {INSERT ORGANISATION NAME}. Each Appendix, except as its terms otherwise expressly provide, shall be a complete and exclusive statement of its subject matter and shall supplement and modify the terms and conditions of this Agreement for the purposes of the corresponding scope of work only. Client acknowledges that it is entering into this Agreement solely on the basis of the agreements and representations contained herein, and that it has not relied upon any representations, warranties, promises, or inducements of any kind, whether oral or written, and from any source, other than those that are expressly contained within this Agreement. Client acknowledges that it is entering into this Agreement for its own purposes and not for the benefit of any third party. Each party acknowledges that it is a sophisticated business entity and that in entering into this Agreement it has had the opportunity to consult with counsel of its choosing.. Neither party may otherwise assign this Agreement or any Appendix without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed.

11.2 If any term or provision of this Agreement is found by a court of competent jurisdiction to

be invalid, illegal or otherwise unenforceable, such term or provision shall not affect the other terms or provisions of this Agreement or this Agreement as a whole, but such term or provision shall be deemed modified to the extent necessary, in the court‟s opinion, to render such term or provision enforceable. Upon such modification, the rights and obligations of the parties shall be construed and enforced in accordance with such modification, preserving to the fullest permissible extent the intent and agreements of the parties set forth in this Agreement.

12. Client’s Representative The Client/MSSDS shall appoint and notify the Proposer/ Proposer in writing the name of the Competent Authority /Officer. The Client may from time to time appoint some other person as the Competent Authority /Officer in place of the person previously so appointed and shall give a notice of the name of such other person to the Proposer

46 Annex 4

without delay. No such appointment shall be made at such a time or in such a manner as to impede the progress of work on the Facilities. Such appointment shall only take effect upon receipt of such notice by the Proposer.

The Competent Authority /Officer shall represent and act for the Client at all times during the performance of the Contract. All notices, instructions, orders, certificates, approvals and all other communications under the Contract shall be given by the Competent Authority /Officer, except as herein otherwise provided. All notices, instructions, information and other communications given by the Proposer to the Client under the Contract shall be given to the Competent Authority /Officer, except as herein otherwise provided.

13. Proposer’s Representative

If the Proposer‟s Representative is not named, the Proposer shall appoint the Proposer‟s Representative and shall request the Client in writing to approve the person so appointed. The request must be accompanied by detailed curriculum vitae for the nominee, as well as description of any other responsibilities the nominee would retain while performing the duties of the Proposer‟s Representative. If the Client does not object to the appointment, the Proposer‟s Representative shall be deemed to have been approved. If the Client objects to the appointment giving the reason therefore, then the Proposer shall appoint a replacement of such objection.

14. Objections and Removals

The Client may, by notice to the Proposer, object to any representative or person employed or trainer or service provider by the Proposer in the execution of the Contract who, in the reasonable opinion of the Client, may have behaved inappropriately, be incompetent, or be negligent. The Client shall provide evidence of the same, whereupon the Proposer shall remove such person from work.

14.1. Any notice or other communication provided under this Agreement shall be in writing and

shall be effective either when delivered personally to the other party, or five (5) days following deposit of such notice or communication into the India mail (registered post acknowledgement due), facsimile (with confirmation of delivery) or courier delivery services (with confirmation of delivery), addressed to such party at the address set forth on the initial page of this Agreement. Either party may designate a different address by notice to the other given in accordance with this Agreement.

15. Force Majeure

Neither Party to this Agreement or to the SLA shall be liable to the other for any loss or damage which may be suffered by the other due (directly) to the extent and for the duration of any cause beyond the reasonable control of the Party unable to perform (“Force Majeure”) events such as but not limited to acts of God not confined to the premises of the Party claiming the Force Majeure, flood, drought, lightning or fire, earthquakes, strike, lock-outs beyond its control, labor disturbance not caused at the instance of the Party claiming Force Majeure, acts of government or other competent authority, war, terrorist activities, military operations, riots, epidemics, civil commotions etc. No failure, delay or other default of any Proposer to either Party shall entitle such Party to claim Force Majeure.

Annex 4 47

The Party seeking to rely on Force Majeure shall promptly, within 2 days, notify the other Party of the occurrence of a Force Majeure event as a condition precedent to the availability of this defense with particulars detail in writing to the other Party and shall demonstrate that it has and is taking all reasonable measures to mitigate the events of Force Majeure.

In the event the Force Majeure substantially prevents, hinders or delays the Proposer‟s performance of Services necessary for the operation of Project‟s critical business functions for a period in excess of 5 days, MSSDS may declare that an emergency exists. MSSDS will issue a notice to the Proposer to resume normal services at all affected sites and for all operations within a period of 7 days. In the event that the Proposer is not able to resume services within the next 7 days, MSSDS may terminate the Agreement and/or obtain substitute performance from an alternate Proposer. However, the event of Force Majeure is to be reviewed under two categories i.e. prior to commencement of operations and post commencement of operations respectively.

Prior to commencement of operations: If the event of Force Majeure occurs prior to commencement of operations and continues for a period in excess of 10 days, then MSSDS will grant a period of 7 days to the Proposer to resume normal activities under this Agreement. In case the Force Majeure event continues, then MSSDS may discuss the issue with the Proposer and revise the existing timelines for the Project. If the Proposer does not complete the Project Implementation in accordance with the revised timeless, MSSDS will have the option to terminate this Agreement.

Post commencement of operations: If Force Majeure occurs post commencement of operations and continues for a period in excess of five days, then MSSDS will grant a period of 7 days to the Proposer to resume normal services under this Agreement. In case the Force Majeure event continues, MSSDS may grant an extension of time to the Proposer for rectifying the situation. If there is any further delay despite the extended period, MSSDS will have the option to terminate the Agreement.

Notwithstanding the terms of this section, the failure on the part of the Proposer under the SLA to implement any disaster contingency planning and back-up and other data safeguards in accordance with the terms of the SLA against natural disaster, fire, sabotage or other similar occurrence shall not be an event of Force Majeure.

15.1 No waiver of any provision of this Agreement shall be effective unless it is in writing and

signed by the party against which it is sought to be enforced. The delay or failure by either party to exercise or enforce any of its rights under this Agreement shall not constitute or be deemed a waiver of that party‟s right to thereafter enforce those rights, nor shall any single or partial exercise of any such right preclude any other or further exercise of these rights or any other right.

15.2 Where this Agreement is to be, amongst others, admitted as evidence, for the purposes

of legal proceedings of any nature in any forum, copies of this Agreement, certified to be true copies by authorized personnel of the parties shall be deemed original solely for such purpose. This Agreement and/or each Appendix may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

48 Annex 4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. {INSERT ORGANIZATION NAME} MEGHALAYA STATE SKILL DEVELOPMENT SOCIETY By: _____________________________ By: _________________________ Name: Name: Title: Title: Date: Date:

Annex A: Scope of Activities Project Title: XXX Geographical Scope: Activity Schedule:

Particulars/Trainings Year 1 Year 2

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Outputs:

Annex 4 49

Annex B: Payment schedule

Payment Milestone

35% As an advance on signing of the agreement between MSSDS and the skills training provider. Amount would be computed as per the number of trainees envisaged in the approved proposal. Advances would be secured with bank guarantee

20% At the mid-way point of the training program, based on actual attendance.

30% One week after the completion of training program, based on actual attendance and submission of financial statements and reports.

15% 6 months after the completion of training program, concluding the handholding support to the trainees, during employment. This payment would be based on actual numbers of trainees successfully reaching this stage, and submission of financial reports and the successful achievement of the milestones & outcomes agreed to in the contract.

50 Annex 5

‘CHARITABLE ACTIVITY’-NOTIFICATION 1. Notification No. 25/2012-ST dated 20 June 2012 2. “Charitable activities” means activities relating to–

a) public health by way of –

I. care or counseling of (i) terminally ill persons or persons with severe physical or mental disability, (ii) persons afflicted with HIV or AIDS, or (iii) persons addicted to a dependence-forming substance such as narcotics drugs or

alcohol; or II. public awareness of preventive health, family planning or prevention of HIV infection;

b) advancement of religion;

c) advancement of educational programs or skills development relating to,-

i. abandoned, orphaned or homeless children; ii. physically or mentally abused and traumatized persons; iii. prisoners; or iv. persons over the age of 65 years residing in a rural area;

d) preservation of environment including watershed, forests and wildlife; or

e) advancement of any other object of general public utility up to a value of twenty five lakh rupees in a financial year subject to the condition that total value of such activities had not exceeded twenty five lakh rupees during the preceding financial year; or

Explanation: - For the purpose of this clause, „general public‟ means the body of people at large sufficiently defined by some common quality of public or impersonal nature.

Annex 6 51

ANNUAL & MONTHLY PLANNING FORMAT

To be prepared during implementation

52 Annex 8

FORMAT FOR REPORTING PLACEMENT OF TRAINEES

To be prepared during implementation