There needs to be a road map to rescue private Industrial Training Institutes from their weak state

The only way to mobilize adequate resources the right way is to do skills training and have equipment and tools that keep pace with changing needs and ensure that employers have skin in the game.

Small shops, basements, tin sheds and godowns. These are not random workplaces but places where private Industrial Training Institutes (ITIs) are running in the country (India). Disturbing facts such as these come from the report of the Standing Committee on Labour (2017-18) headed by Bharatiya Janata Party MP Kirit Somaiya, on the “Industrial Training Institutes (ITIs) and Skill Development Initiative Scheme” of the Ministry of Skill Development and Entrepreneurship (MSDE). It was submitted to Parliament few months ago.

Explaining the scale-up

The ITIs were initiated in the 1950s. In a span of 60 years, until 2007, around 1,896 public and 2,000 private ITIs were set up. However, in a 10-year period from 2007, more than 9,000 additional private ITIs were accredited.

What explains this huge private sector scale-up? The committee says that it is not efficiency but a disregard for norms and standards. However, the ITIs are not alone. The National Skill Development Corporation (NSDC) today has more than 6,000 private training centers. Since it has short-term courses and its centers open and close frequently, it is all the more prone to a dilution of standards. Private training partners have mushroomed at the rate of five a day (mostly with government support) and it is clear that the government has been unable to regulate private institutions for quality. Private sector engagement in skill development has been taken up by standalone private training partners and not employers. The latter could have made the system demand-driven. Meanwhile, the lack of a regulator for skill development, with teeth, has led to poor quality affiliation, assessment and certification.

The Somaiya committee report is scathing in its tone and specific in details. It outlines instances of responsibility outsourcing, no oversight, connivance and an ownership tussle between the Central and State governments.

Private-ITI accreditation troubles started when the Quality Council of India (QCI), a private body, was hired due to “high workload of affiliation and shortage of [government] staff”. The QCI did not follow accreditation norms created by the National Council for Vocational Training (NCVT) and it appears that neither scale nor standard was achieved, but only speed. ‘Speed’ now risks the future of 13.8 lakh students (on an average, 206 students per ITI) studying in these substandard ITIs, which can be closed any time.

The ITIs have a unique functioning set-up. While they were formed under the government’s Craftsman Training Scheme, their day-to-day administration, finances and admissions are with State governments. The NCVT performs an advisory role. The ITIs often run into issues with no one to take ownership. A case in point is the examination process — the question paper is prepared by the NCVT, but administered and evaluated by instructors of the State Councils for VT. The NCVT is just a stamp with no role in actually assessing quality. How can quality outcomes be expected without quality assessments?

The parliamentary committee has shed light on the ITIs. If the same exercise were extended to other skill development schemes, the picture would be grimmer. There are 183 cases pending in High Courts on non-compliance of norms by the ITIs. However, the short-term training programs of the Ministry evade any scrutiny and action. For example, the Standard Training Assessment and Reward scheme spent ₹850 crore in 2013-14 with no norms for quality. There were no Aadhaar checks, attendance requirements and batch size limitations. Private training operators have made a profit with no court cases.

The report also reinforces disturbing findings of a national survey by the research institute (NILERD) of the Planning Commission in 2011 about private ITIs: they offered training in less than five trades (in government ITIs it is less than 10); had fewer classrooms and workshops for practice; and their teachers were very poorly paid.

A starting point

So, what can we do systemically? A good point to start would be the Sharda Prasad Committee recommendations.

We need better oversight, with a national board for all skill development programs. The core work (accreditation, assessment, certification and course standards) cannot be outsourced. Like every other education board (such as the CBSE), a board is required in vocational training that is accountable. Since we have the NCVT as a legacy, it should be used as a kernel to constitute the board. We should also have a mandatory rating system for the ITIs that is published periodically. A ranking of the ITIs on several parameters such as the one done by the National Assessment and Accreditation Council in tertiary education can be replicated.

There should be one system, with one law and one national vocational education and training system. The silos in which vocational training happens in India is unfortunate. We need to create a unified national vocational system where the ITIs, NSDC private vocational trainers and vocational education in schools, and the other Central ministries conducting training gel seamlessly and can learn from, and work with each other. A unified legal framework can facilitate such a unification. The absence of a law has only weakened regulation and monitoring. What we need is a national vocational act that replaces all scattered regulations — recommended in the 12th Five Year Plan.

Micro-institutional reforms

The ITIs have many internal issues such as staffing and salaries that need attention, as the NILERD nationwide survey in 2011 had found. There is also a critical need to reskill ITI teachers and maintain the student-teacher ratio. Since technology obsolescence is a continuous challenge, financial support envisaged through the NSDC should be extended to the ITIs.

The primary reason for hiring the QCI and the mess that followed was this: “huge workload of affiliation and shortage of staff”. This is true even today. It is unlikely that without fixing this, the QCI mistake will not be repeated. There has been a tremendous push by the government for private sector talent in government; perhaps it is worth considering talent from the open market to fill up higher posts in skill development.

Institutional reforms such as moving the office of the Directorate General of Employment (the arm that has all data on employment) from the Ministry of Labour to the MSDE would help. It would also complement the Directorate General of Training already under MSDE.

Employers and financing

This is the last but perennial challenge. Given the scale of our demographic challenge, a belief that financing from corporate social responsibility, multilateral organizations such as the World Bank, and the government will meet the financial needs for skill development is wishful thinking.

The only way to mobilize adequate resources the right way is to do skills training and have equipment and tools that keep pace with changing needs and ensure that employers have skin in the game. This is possible through a reimbursable industry contribution (RIC) — a 1-2% payroll tax that will be reimbursed when employers train using public/private infrastructure and provide data. RIC, which is implemented in 62 other countries, was recommended in the 12th Plan and is an idea whose time has come. An estimate by the first author of this article indicated that such a tax would generate ₹17, 000 crore per annum for skilling in India — which is several multiples of State/Union governments’ current annual budget for skilling.

Finally, while there is so much talk of skills for the future and the impact of artificial intelligence and automation, data show that 13.8 lakh students in the ITIs are suffering due to poor institutional accreditation. Placement in NSDC training has been less than 15%. Maybe if we take care of the present, we will be better prepared for the future.

(Santosh Mehrotra is Professor of Economics, Centre for Labour, Jawaharlal Nehru University, a member of the Prasad Expert Committee on Sector Skill Councils, and a lead author of the National Skills Qualification Framework. Ashutosh Pratap works on skills and jobs issues and has worked with the Expert Committee)