1. Prologue
  2. What’re the problems?
  3. What’re the solutions?
  4. #1: define “skill development”
  5. #2: Decide Outcomes
  6. #3: Cash-funding on outcomes
  7. #4: Motivate both trainee and trainer
  8. #5: Monitor beneficiaries
  9. Appendix: NSDA vs NSDC


  • 2013, December: Panel to rationalize various skill Development schemes. It gave report in 2014, October.
  • Relevance:  GS Mains 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  • It will be a funny and fruitful exercise if you replace the word “skill/skill development” in the below article and substitute with any other word like “poverty / unemployment / rural /education / nutrition / healthcare”. Then same fodder can be applied to variety of questions and essay.

Panel Composition:

  • S.Ramdorai, The chairman of NSDA- National Skill Development agency. Mind it- NSDA and not NSDC.
  • Officials from two-dozen ministries.

What’re the problems?

  1. Total 22 ministries running parallel schemes for Skill development- textile, commerce, HRD, labour and so on.
  2. States have created their own State Skill Development Missions (SSDMs)
  3. Each of them has different norms for eligibility criteria, training duration, scholarship/subsidy to beneficiary,  outcomes, monitoring and tracking mechanism.
  4. This leads to Resource wastage, while some beneficiaries get multiple benefits for undergoing same type of training.

What’re the solutions?

NSDA panel gave “five point someone” strategy:

NSDA report on skill Development

How to design a scheme properly? NSDA Panel’s 5 Point strategy

  1. First define “what exactly is skill development?”
  2. Second, decide outcomes or success parameters
  3. Third, give cash funding only based on the outcomes.
  4. Fourth, motivate both trainer and the trainee.
  5. Fifth- monitor the beneficiaries of all the “Rajiv Gandhi skill LELO yojanas”.

#1: define “skill development”

Panel identified four types of skill development:
  • Gives training to fresh entrants / no0bs so they became sellable in labor market.
  • Give them minimum 200 hours of training.
  • upgrading skill of a person already doing some job / business.
  • Give’em minimum 80 hours of training.
Recognition  Giving paper degrees and fancy certificates to skilled person.
College Running formal education courses like diplomas and degrees.
  • If a given scheme is not doing ONE of the FOUR things listed above, then it’s not a skill Development scheme.
  • In case, you are wondering how can we play “word-replacement” game on this? Well, “Defining” a parameter has always been a controversial exercise. Recall the new Poverty line design by Rangarajan and how the NATION (Arnab Goswami) and RANGA (the villain) were unhappy because of that.
  • Same goes for defining malnutrition, Education under Sarva Sikha Abhiyan, “productive assets” under MNREGA and so on.

#2: Decide Outcomes

At present, the ministries measure “success outcome” of their schemes on two parameters only:

  1. How many people got training?
  2. How many crores spent?

Panel says we must measure outcomes in a more rational manner:

  1. Did the person get job after training?
  2. For how long was he able to ‘retain’ that job? [e.g. Youngman got fancy certificate under some training scheme and got job in an automobile company. But he was thrown out in less than a month for he lacks the specific job-skills, then the scheme is a failure.]
  3. If a person was already in job/business, then, after getting training in our scheme, whether his income increase or not?

How can we play “word-replacement” game in this?

  • Consider education scheme Sarva Siksha Abhiyan. It measures outcomes on “how many teacher employed, no. of students enrolled, no. of buildings constructed”.
  • But a rational outcome can measured from NGO Pratham’s survey i.e. can a 5th Standard kid read a textbook and solve math sums of 2nd standard or not?

#3: Cash-funding on outcomes

  • Panel recommends- first do a “time study” and “cost study” of the given training program.
  • Then, Decide scheme costs on “Per trainee, on per hour basis.”
  • Government should release the fund money based on OUTCOMES. e.g. 100 people trained but only 50 got job, then funding= 50 people x cost per person x no. of training hours.
  • Result: cost cut down and fiscal deficit reduced.
  • This cost-cutting formula will not apply to Home ministry’s UDAAN Scheme for J&K youth training. Because its main purpose is ‘national-integration’.

#4: Motivate both trainee and trainer

Motivate trainer (teacher)

  • Trainer /teacher will Rs. 3000 bonus if 70% of his batch-students achieve the outcomes.
  • Rs. 5,000 bonus, if 90% of students achieve outcomes.
  • This will motivate the trainers to focus more on the individual beneficiaries.
  • This type of incentives already present in healthcare sector e.g. ASHA-workers get additional bonus for Vasectomy, DOTS program and on.
  • But, we can adopt the same for school Teachers under Sarva Siksha Abhiyan, if 70% or 90% of their students pass Pratham’s test, teacher get salary bonus.

Motivate Trainee (student)

  • Panel says, beneficiary must be give minimum 1,000 rupees security deposit. It’ll be refunded at the end of program.
  • This will ensure only “Serious players” join the program, attend all lectures, learn the concepts and make handwritten notes seriously.
  • Although hard to adopt in other sectors e.g. asking BPL family to give refundable deposit before their kid joins a posh school under 25% reservation quota under right to education act. OR asking a TB patient to deposit 1000 rupees to ensure he takes DOTS pills on regular basis!

#5: Monitor beneficiaries

In Government schemes, outcome is measured in how many crores spent and under the budget rules, department has to return unspent money after 31st March. Leads to following angles

  1. “March rush”: from April to December laziness. From January to March suddenly the ministries will run dozens of camps and seminars to spend money in haste, before 31st March comes.
  2. Bogus beneficiaries and corruption.
  3. Same person getting multiple training /scholarship from multiple ministries for similar type of training.

Therefore, panel says we must setup Management Information System(MIS) and Adhar cards to track beneficiaries and their careers. Now, Take this as a framework answer to any of the questions asked on social schemes- how to fix its design and implementation!

Appendix: NSDA vs NSDC

What’s the difference?
National skill development Agency National skill development Corporation
Born in 2013 Born in 2009
  • 100% Government owned Autonomous body.
  • Earlier this was Prime minister’s national council on skill development (PMNCSD).
  • Not for profit “Company” under the Companies Act
  • Ownership: 51% private ; 49% Finance ministry
  • Advisory and Coordination work for Union, States, NSDC, international donors and private companies.
  • Run national database for labor market information.
  • Ensure SC, ST, OBC, women/minorities
  • Give skill training to 150 million Indians by 2022.
  • Some websites say 500 million. But Actual target to cover 30% of the 500 million people by 2022. So 0.3 x 500=150 million.

Mock Questions for Mains (GS2)

  • Discuss the problem areas in the design and implementation of Skill development schemes in India. List the necessary modifications in them to reap full demographic dividend. 200 words.
  • Same question for education, healthcare, handicraft, tribal-Development and other sectors.