For Private Circulation only National Skill Development Corporation November 2010 Dilip Chenoy MD & CEO
. However plagued by inadequate skilled manpower 1 3 High rates of drop outs in the education space Very low enrolments for VET 2 Employability of the skilled a challenge Only one in four engineering graduates in India Is employable, based on their technical skills, English fluency, teamwork and presentation skills and of the 4 lakh odd engineering graduates, who graduate each year, only about 20% is good enough for India Inc. - NASSCOM Skilling getting a major policy thrust 4 In service training levels very low in India 1
Large skill gap witnessed in India across 21 key sectors 2
NSDC created as a part of the government s co-ordinated action in the skills space Prime Minister s National Council for Skill Development National Skill Development Co-ordination Board NSDC structure NSDC is a Public Private Partnership created by the Ministry of Finance 51% stake by industry 49% stake by GOI Initial funding of ~ INR 1000 cr received from the GOI and parked with the NSDF for use of NSDC Government Initiatives 17 Central Ministries Private sector initiatives Target skilling / up skilling 150 million people by 2022 by fostering private sector participation 3
NSDC Significant Milestones: 2008 2010 GENESIS OF NSDC Feb 2008-Dec 2008 Budget speech 2008-2009, Formation of NSDC announced FOUNDATION PHASE Jan 2009-Aug 2009 Mckinsey & Co appointed to work on mandate and Roadmap OPERATIONAL PHASE Sept 2009 onwards FM reviews NSDC DISBURSEMENT PHASE Feb 2010 onwards 3 proposals cleared for funding (Rs. 45.38 Crores) July 31st 2008 - NSDC Chairman Appointed IMaCS appointed Skill Mapping Reports Formal Launch of NSDC Round 2 : 8 Proposals received B-Able 1 million to be trained in 10 years GJEPC 18,000 to be trained in 10 years Dec 2008 - Board Constituted Round 1-8 Proposals received; 2 shortlisted Proposal Call & Evaluation Process finalised; IMaCS & Seth Dua appointed Gram Tarang 21,000 to be trained in 5 years 4
Draft - Not for circulation Investor Servicing NSDC to achieve mandate through three key pillars Create Fund Enable Proactively catalyze creation of large, quality vocational training institutions Reduce risk by providing patient capital Improve returns by providing viability gap funding Support systems required for skill development Sector skill councils Quality Assurance Information system Train-the-trainer Create the vision and help define the path Demonstrate commitment to the purpose Create a viable ecosystem 5
Draft - Not for circulation Key elements of NSDC funding Elements Description Who gets funded? Any organization with scalable, sustainable business model that ensures employability of the resources trained Including start ups What is the amount of funding? ~Upto 75% of the project cost What is the form of funding? Debt at subsidized rates ; other features like moratorium built in depending upon nature of project Equity Grant funding (only in very select cases) Is there special focus? NSDC is looking to fund businesses that seek to create employable people across all sections of the society 6
Robust process designed to ensure rapid turnaround in the process Roles and responsibilities Board Representatives of key stakeholders both government and private sector Chairman and CEO of NSDC Final approval of proposals recommended by the PAC Proposal Approval Committee (PAC) Diverse representation from the MoF, private equity, NGOs, industry Proposal Evaluation Committee (PEC) Due diligence partners NSDC team Recommend the proposal for approval by the Board or, Consider proposal not worthy of further consideration Form a view on the proposal based on discussions after financial, technical and legal due diligence for discussion at the PAC Turnaround of < =3 months targeted for proposals Proposal Introduction and evaluation test of responsiveness, technical, financial and legal due deligence Detailed evaluation of worthy proposals Financial, technical and legal due diligence on the proposals 7
Processes and Manuals Created Draft - Not for circulation Proposal Evaluation Procurement Manual Diligence Manual Funding Guidelines Proposal Template for NGOs and Others Financial Template for Business Plan Agreements : Grant, loan and equity Communication & Branding Brochure Printed Standard presentations for funding agencies, prospective proposers, industry associations Hindi & English website Human Resources HR Manual & Policy Document 8
Proposal Evaluation & Approval Process INTRODUCTION INVITATION FOR PROPOSAL (IFP) As per Standard Template Test of Responsiveness Proposal Evaluation Committee (PEC) Submission of PEC Report Evaluation of PEC Report by the Proposal Approval Committee (PAC) EVALUATION & APPROVAL Issuance of MOA and Negotiations, Finalization of Pre- Disbursement Conditions, Collaterals etc. Submission of PAC Report Consideration of PAC Report by Board Approval of Proposal by Board 9 9
Agenda NSDC The Journey so Far Plan going forward 10
Agenda NSDC The Journey So Far 11
12 proposals already approved, strong pipeline going forward Proposals Number Funding requirements People trained in year 1 / year 10 Training capacity per annum Names of proposals Funded 4 Rs 64.58 cr ~ 10000 / 1.5 Mn ~ 0.2 Mn IIGJJ, B Able, Gram Tarang, iskill Approved by Board Approved by PAC 8 Rs 250.98 cr ~ 119000 / 17.1 Mn ~ 3.05 Mn * Centum, IAHV, IL&FS, Gras, Edubridge, istar, Pratham, 4 Rs 113.25 cr ~ 7640/2.79 mn.59 mn CREDAI, Empower, MERC, IISD In addition, 26 proposals under evaluation Note : Additional capacity being created through government grants not included 12
13 of the 20 priority sectors already impacted within approved and funded proposals Note : Sectors not covered include Chemicals &Pharma, Media & entertainment, F&F, IT&ITES, Education, Health Care, Transportation &Logistics 13
~253 locations covered across 27 states of India S. No State Locations 1 Uttar Pradesh 30 2 Maharashtra 27 3 Madhya Pradesh 25 4 Andhra Pradesh 21 5 Orissa 19 6 Tamil Nadu 18 7 Gujarat 16 8 Karnataka 14 9 Rajasthan 14 10 Punjab 12 11 Himachal Pradesh 7 12 Haryana 7 13 West Bengal 7 14 Uttarakhand 7 15 Jharkhand 6 16 Delhi/NCR 5 17 Bihar 5 18 Kerala 3 19 J & K 2 20 Tripura 1 21 Sikkim 1 22 Pondicherry 1 23 Nagaland 1 24 Meghlaya 1 25 Manipur 1 26 Assam 1 27 Arunachal Pradesh 1 253 14
From Employment to Employability Select case study B - ABLE Elements Deal value and size Description Rs 30.3 Cr Debt financing No of centres to be launched 400 No of people trained in 10 years 1 Mn Capacity created per annum 0.2 Mn Business model Hub and spoke model for centre creation In addition to classroom training guaranteed 4 week apprenticeship with a prospective employer Tie ups with corporates like L&T and Tata dealers established 6 trades being covered Agriculture and allied activities, Construction, Tourism, Banking, Hospitality, Food Processing Progress till date 3 centres set up Purnia, Dausa and Dehra Dun 49 enrollments 15
From employment to employability Select case study Work Skills Elements Description Deal value and size Rs 1.1 Cr Equity (27% stake) ; 12.2 Cr Debt at 12% No of centers to be launched 383 across 11 states No of people trained in 10 years 11.57 Mn Business model Created as JV between NSDC and Centum (a Bharti subsidiary) Franchisee model with governance structure put in at different levels Govt grants being used to target BPL students, but attempt to move towards self sustaining model of funding Innovative use of existing infrastructure to impart training Progress till date Advance stages of discussion with KVIC for skilling workforce Discussions with state governments underway Content being developed for skills training in different sectors 16
From employment to employability Select case study Gram Tarang Elements Deal value and size Description Rs 10 Cr funding for Capex for 1 year No of centres to be launched 5 No of people trained in 5 years 21000 Capacity created per annum 1000 Business model Targeted at tribal youth in naxal affected areas Training centres being created to train people in Auto CAD, advanced welding etc Training on advanced machinery funded by NSDC Fully residential programme Progress till date 4 centres with capacity of 1000 people already operational Equipment (CNC Lathe, CNC Milling, CAD/CAM lab bought), affiliation from NCVT received 17
Multiple channels being used to enhance brand and reach Seminars and presentations Aspen Aspire Skills Automotive roundtable CII YI Round Table CII National and North & South Councils FICCI Skills Summit IGCC IGNOU IMA Indo German JWG (MOLE) NASSCOM National Workshop on Skills MP Govt. PA Forum Skills Workshop Min. of Food Processing USOF, DoT Yuva Parivartan -CII Northern Council CII Western Council Region EFI National HRM Summit Connect with Corporates Aptech DLF Foundation ESSAR Everonn GRASIM Hindustan Unilever Hughes Communication India Can EduComp Industree JCB MART NIIT NIS Sparta Punj Lloyd Reliance RMoL (Raj. Govt.) REI-Sahaj Schneider Tata Chemicals Tata Tele Trent Voltas Volvo Wadhwani Foundation LIQVID Connect with agencies ACMA ASSOCHAM CAPSI CII CII India @ 75 DFID FICCI IAMR IGCC IGNOU ILO ISTE NABARD NASSCOM NIOS PHD CHAMBER SIAM TVET UK UNDP WORLD BANK INDIAN BUSINESS CHAMBERS Print and Web Website developed and being constantly upgraded Brochures created and being distributed extensively in seminars etc Conceptualization of Business Plan Competition for disabled people with National Trust 18
Sector skills councils being set up across sectors-process initiated Funding for first sector skill council Automotive Skill Development Council (ASDC) approved by Board Discussions underway with 13 other sectors for setting up SSCs Auto, Construction, Retail, BFSI, Energy, Textiles, IT/ITES, Security, Domestic Help, Handicraft, Plumbing, Food processing,travel & Tourism, Healthcare Meetings held with officials from UK, Australia, New Zealand and German Skills Councils Best practices sharing with experts from ILO, WB and INSSO Communication material created for advocacy 19
Organization and processes being developed to ensure smooth operations Illustrative Proposal evaluation and monitoring Evaluation Procurement manual Diligence Manual Funding Guidelines Proposal Template for NGOs and others Financial template for business plan Agreements for grants, loans and equity Monitoring Checklist of Reports for Contract Monitoring Report Formats for Financial & Technical Monitoring Streamline reporting processes for on time reports in standard formats Nomenclature for issue of certificates Internal processes HR Performance Review System HR manual HR strategy under review.. Organisation Committee structure created Proposal Evaluation Comm, Proposal Approval Committee etc Responsibilities being defined for different verticals in the organization Document Management SDMS RFP ready for release 20
Attempt to ensure quick turnaround of proposals Timelines to be standardized over time Time taken (in days) between different stages in the proposal evaluation process - Illustrative Evaluation stage Decision making stage Proposal name Date of receipt of proposal Test of Responsiveness Final Evaluation and approval by Proposal Eval Comm Recommendation by Proposal Approval Comm Proposal tabled to Board Final approval by Board Funding I Skill 9 35 5 7 Avg 0 TAT of 1.5 NA Pratham 11 11 5 7 months 0 achieved NA Edubridge 68 92 3 3 NA I Star 26 29 3 3 NA GRAS 7 28 8 13 NA Indicative timelines going forward 10-15 days 30-45 days 30-50 days 30 days Turnaround of < =3 months targeted for future proposals Note : Benchmarked with PE funds where typical TAT is 3 months and banks where TAT is 2-3 months for similar proposals 21
Agenda Plan forward 22
To skill 150 million by FY22 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Total Total Proposals per year to be Funded (nos.) 25 32 44 52 60 65 62 50 42 31 23 14 500 Small ticket proposal 6 11 16 21 24 25 22 18 15 11 9 6 184 Medium ticket proposal 16 18 24 27 32 35 34 28 24 18 12 7 275 Big ticket proposal 3 3 4 4 4 5 6 4 3 2 2 1 41 Total Trainee Output per year (nos. lakh) 1.2 6.1 15.7 33.4 60.2 97.9 146.1 203.9 266.4 331.8 395.1 454.2 2011.9 70 60 50 40 30 20 10 0 454.2 395.1 65 60 62 331.8 52 50 266.4 44 203.9 42 32 146.1 31 25 97.9 23 60.2 33.4 14 1.1 6.1 15.7 1 2 3 4 5 6 7 8 9 10 11 12 500 450 400 350 300 250 200 150 100 50 0 Total no. of proposals (in nos.) Total trainee output (in lakh) 23
Thank you Contact Information: Dilip.chenoy@nsdcindia.org