national skill development corporation november...
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For Private Circulation only
National Skill Development Corporation
– November 2010
Dilip Chenoy
MD & CEO
1Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
…. However plagued by inadequate skilled manpower
High rates of drop outs in the education space
Employability of the skilled a challenge
Very low enrolments for VET
1 3
Only one in four engineering graduates in IndiaIs employable, based on their technical skills,English fluency, teamwork and presentationskills and of the 4 lakh odd engineeringgraduates, who graduate each year, only about20% is good enough for India Inc.
- NASSCOM
2In service training levels very low in India
4
Skilling getting
a major policy
thrust
2Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Large skill gap witnessed in India across 21 key sectors
3Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Prime Minister’s National Council for Skill
Development
National Skill Development
Co-ordination Board
Government
Initiatives17 Central Ministries
Private sector
initiatives
NSDC created as a part of the government’s co-ordinated
action in the skills space
NSDC structure
NSDC is a Public Private
Partnership created by the
Ministry of Finance
• 51% stake by industry
• 49% stake by GOI
Initial funding of ~ INR
1000 cr received from the
GOI and parked with the
NSDF for use of NSDC
Target skilling / up skilling
150 million people by 2022
by fostering private sector
participation
4Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
GENESIS OF NSDC
Feb 2008-Dec 2008
FOUNDATION PHASE
Jan 2009-Aug 2009
Dec 2008 - Board Constituted
July 31st 2008 -NSDC Chairman
Appointed
Budget speech 2008-2009,
Formation of NSDC announced
Round 1 - 8 Proposals received;
2 shortlisted
IMaCS appointed –Skill Mapping
Reports
Mckinsey & Co appointed to work on mandate and
Roadmap
NSDC Significant Milestones: 2008 – 2010
OPERATIONAL PHASE
Sept 2009 onwards
Proposal Call & Evaluation Process
finalised; IMaCS & Seth Duaappointed
Round 2 : 8 Proposals received
Formal Launch of NSDC
FM reviews NSDC
DISBURSEMENT PHASE
Feb 2010 onwards
Gram Tarang – 21,000 to be trained in 5 years
GJEPC – 18,000 to be trained in 10 years
B-Able – 1 million to be trained in 10 years
3 proposals cleared for funding (Rs. 45.38
Crores)
5
Draft - Not for circulation
Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Proactively catalyze
creation of large,
quality vocational
training institutions
Create
Reduce risk by
providing patient
capital
Improve returns by
providing viability
gap funding
Fund
Support systems
required for skill
development• Sector skill councils
• Quality Assurance
• Information system
• Train-the-trainer
Enable
Create the
vision and help
define the path
Demonstrate
commitment to
the purpose
Create a viable
ecosystem
Investor Servicing
NSDC to achieve mandate through three key pillars
6
Draft - Not for circulation
Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Key elements of NSDC funding
• Any organization with scalable, sustainable business model that ensures
employability of the resources trained
• Including start upsWho gets funded?
What is the
amount of funding?
What is the form
of funding ?
DescriptionElements
• ~Upto 75% of the project cost
• Debt at subsidized rates ; other features like moratorium built in depending
upon nature of project
• Equity
• Grant funding (only in very select cases)
Is there
special focus?• NSDC is looking to fund businesses that seek to create employable people
across all sections of the society
7Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Robust process designed to ensure rapid turnaround in the
process
Proposal Evaluation Committee (PEC)
• Recommend the proposal for
approval by the Board or,
• Consider proposal not
worthy of further
consideration
• Form a view on the proposal
based on discussions after
financial, technical and legal
due diligence for discussion
at the PAC
• Detailed evaluation of worthy
proposals
• Financial , technical and
legal due diligence on the
proposals
Roles and responsibilities
Proposal Approval Committee (PAC)
Diverse representation from the MoF, private equity, NGOs,
industry
Board
Representatives of key stakeholders – both government and
private sector
Chairman and CEO of NSDC
Due diligence partners
NSDC team
Proposal Introduction and evaluation – test of
responsiveness, technical, financial and legal due
deligence
• Final approval of proposals
recommended by the PAC
Turnaround of
< =3 months
targeted for
proposals
8
Draft - Not for circulation
Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Processes and Manuals Created
Proposal Evaluation
Procurement Manual
Diligence Manual
Funding Guidelines
Proposal Template for NGOs and Others
Financial Template for Business Plan
Agreements : Grant, loan and equity
Communication & Branding
Brochure Printed
Standard presentations for funding agencies,
prospective proposers, industry associations
Hindi & English website
Human Resources
HR Manual & Policy Document
9Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
INTRODUCTION
INVITATION
FOR PROPOSAL
(IFP)
EVALUATION &
APPROVAL
As per Standard Template
Submission of PAC Report
Test of Responsiveness
Proposal Evaluation Committee (PEC)
Submission of PEC Report
Evaluation of PEC Report by the
Proposal Approval Committee (PAC)
Issuance of MOA and Negotiations, Finalization of Pre-
Disbursement Conditions, Collaterals etc.
Approval of Proposal by Board
Consideration of PAC Report by Board
9
Proposal Evaluation & Approval Process
10Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
NSDC – The Journey so Far
Plan going forward
Agenda
11Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Agenda
NSDC – The Journey So Far
12Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
12 proposals already approved, strong pipeline going forward
In addition, 26 proposals under evaluation
Note : Additional capacity being created through government grants not included
Proposals Number Funding
requirements
People trained
in year 1 /
year 10
Training
capacity per
annum
Names of
proposals
Funded 4 Rs 64.58 cr ~ 10000 / 1.5 Mn ~ 0.2 Mn IIGJJ, B Able,
Gram Tarang,
iSkill
Approved by
Board
8 Rs 250.98 cr ~ 119000 / 17.1 Mn ~ 3.05 Mn * Centum, IAHV,
IL&FS, Gras,
Edubridge, iStar,
Pratham,
Approved by
PAC
4 Rs 113.25 cr ~ 7640/2.79 mn .59 mn CREDAI,
Empower,
MERC, IISD
13Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
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
14Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
~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
15Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
From Employment to Employability
Select case study – B - ABLE
• Rs 30.3 Cr – Debt financing
• No of centres to be launched – 400
• No of people trained in 10 years – 1 Mn
• Capacity created per annum – 0.2 Mn
DescriptionElements
Deal value and size
Business model
Progress till date
• Hub and spoke model for centre creation
• In addition to classroom training guaranteed
4 week apprenticeship with a prospective
employer
• Tie ups with corporates like L&T and Tata
dealers established
• 6 trades being covered – Agriculture and
allied activities, Construction, Tourism,
Banking, Hospitality, Food Processing
• 3 centres set up – Purnia, Dausa and Dehra
Dun
• 49 enrollments
16Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
From employment to employability
Select case study – Work Skills
• Rs 1.1 Cr Equity (27% stake) ; 12.2 Cr Debt at
12%
• No of centers to be launched – 383 across 11
states
• No of people trained in 10 years – 11.57 Mn
DescriptionElements
Deal value and size
Business model
Progress till date
• Created as JV between NSDC and Centum (a Bharti subsidiary)
• Franchisee model with governance structure put in at different
levels
• Govt grants being used to target BPL students, but attempt to
move towards self sustaining model of funding
• Innovative use of existing infrastructure to impart training
• Advance stages of discussion with KVIC for skilling workforce
• Discussions with state governments underway
• Content being developed for skills training in different sectors
17Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
From employment to employability
Select case study – Gram Tarang
• Rs 10 Cr – funding for Capex for 1 year
• No of centres to be launched – 5
• No of people trained in 5 years – 21000
• Capacity created per annum – 1000
DescriptionElements
Deal value and size
Business model
Progress till date
• Targeted at tribal youth in naxal affected
areas
• Training centres being created to train people
in Auto CAD, advanced welding etc
• Training on advanced machinery funded by
NSDC
• Fully residential programme
• 4 centres with capacity of 1000 people
already operational
• Equipment (CNC Lathe, CNC Milling,
CAD/CAM lab bought), affiliation from NCVT
received
18Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Multiple channels being used to enhance brand and reach
Seminars and
presentations
• Aptech
• DLF Foundation
• ESSAR
• Everonn
• GRASIM
• Hindustan Unilever
• Hughes
Communication
• India Can – EduComp
• Industree
• JCB MART
• NIIT
• NIS Sparta
• Punj Lloyd Reliance
RMoL (Raj. Govt.)
• REI-Sahaj
• Schneider
• Tata Chemicals
• Tata Tele
• Trent
• Voltas
• Volvo
• Wadhwani Foundation
• LIQVID
Connect with
Corporates
• ACMA
• ASSOCHAM
• CAPSI
• CII
• CII – India @ 75
• DFID
• FICCI
• IAMR
• IGCC
• IGNOU
• ILO ISTE
• NABARD
• NASSCOM
• NIOS
• PHD CHAMBER
• SIAM
• TVET UK
• UNDP
• WORLD BANK
• INDIAN BUSINESS
CHAMBERS
Connect with
agencies
Website developed and
being constantly
upgraded
Brochures created and
being distributed
extensively in seminars
etc
Conceptualization of
Business Plan
Competition for disabled
people with National Trust
Print and Web
•Aspen Aspire Skills
•Automotive roundtable
•CII – YI Round Table
•CII National and North &
South Councils
•FICCI Skills Summit
•IGCC
•IGNOU
•IMA
•Indo German JWG (MOLE)
•NASSCOM
•National Workshop on
Skills – MP Govt.
•PA Forum
•Skills Workshop Min. of
Food Processing
•USOF, DoT
•Yuva Parivartan
•-CII Northern Council
• CII Western Council
Region
•EFI National HRM Summit
19Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
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
20Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Organization and processes being developed to ensure smooth
operations
Proposal evaluation and monitoring
Evaluation
• Procurement manual
• Diligence Manual
• Funding Guidelines
• Proposal Template for NGOs and others
• Financial template for business plan
• Agreements for grants, loans and equity
Monitoring
• Checklist of Reports for Contract
Monitoring
• Report Formats for Financial & Technical
Monitoring
• Streamline reporting processes for on time
reports in standard formats
• Nomenclature for issue of certificates
Internal processes
HR
• Performance Review System
• HR manual
• HR strategy under review
…..
Organisation
• Committee structure created – Proposal
Evaluation Comm, Proposal Approval
Committee etc
• Responsibilities being defined for different
verticals in the organization
Document Management
• SDMS RFP ready for release
Illustrative
21Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Attempt to ensure quick turnaround of proposals Timelines to be standardized over time
Proposal
name
Date of
receipt of
proposal
Test of
Responsiveness
Final Evaluation
and approval by
Proposal Eval
Comm
Recommendation
by Proposal
Approval Comm
Proposal
tabled to
Board
Final
approval by
Board Funding
I Skill 9 35 5 7 0 NA
Pratham 11 11 5 7 0 NA
Edubridge 68 92 3 3 NA
I Star 26 29 3 3 NA
GRAS 7 28 8 13 NA
Turnaround of < =3 months targeted for future proposals
Time taken (in days) between different stages in the proposal evaluation process - Illustrative
Indicative
timelines
going forward10-15 days 30-45 days 30-50 days 30 days
Evaluation stage Decision making stage
Avg TAT of 1.5
months achieved
Note : Benchmarked with PE funds where typical TAT is 3 months and banks where TAT is 2-3 months for similar proposals
22Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
Agenda
Plan forward
23Proprietary and confidential. This information does not represent and should not be construed as, legal or professional advice. © 2009 NSDC. All Rights Reserved.
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Total
Total Proposals per year to be Funded (nos.) 25 32 44 52 60 65 62 50 42 31 23 14 500
Small ticket proposal 6 11 16 21 24 25 22 18 15 11 9 6 184
Medium ticket proposal 16 18 24 27 32 35 34 28 24 18 12 7 275
Big ticket proposal 3 3 4 4 4 5 6 4 3 2 2 1 41
Total Trainee Output per year (nos. lakh) 1.2 6.1 15.7 33.4 60.2 97.9 146.1 203.9 266.4 331.8 395.1 454.2 2011.9
25
32
44
52
6065
62
50
42
31
23
141.1 6.1 15.7
33.460.2
97.9
146.1
203.9
266.4
331.8
395.1
454.2
0
50
100
150
200
250
300
350
400
450
500
0
10
20
30
40
50
60
70
1 2 3 4 5 6 7 8 9 10 11 12
Total no. of proposals (in nos.) Total trainee output (in lakh)
To skill 150 million by FY22