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FAQS

  • All About NSDC
  • Funding FAQ’s
  • Entrepreneur FAQ’s
  • Training Institute FAQ’s
  • Media FAQ’s

Why was NSDC set up?

The NSDC was set up with an objective of increasing the skill training capacity in the country. It was formed in 2008, with the approval of the Union Cabinet as a not for profit public company under section 25 of the Companies Act, 1956 with a capital base of Rs.10 crore to encourage and synchronize private sector initiative in skills development.

 

The overall objective of NSDC is to create training capacity in the country, fund scalability and sustainability of private enterprise, create a market ecosystem for skill development and meet the targets set out by the Government. NSDC mandate was to train 150 million people by 2022.

Does NSDC have Government representatives on its Board?

NSDC follows highest standards of governance and reports into a board that has nominated representatives from the Government and the Private Sector Associations. Currently NSDC Board has 8 nominees from the private sector and 6 nominees from the Government, including the Chairman of NSDC and the Secretary, Ministry of Skill Development & Entrepreneurship. Government nominees on the Board of NSDC represent government on various sub-committees in the organization. At General Body meetings government nominee presence is mandatory for quorum.

What was the process followed while converting NSDC from a public limited to a private limited company?

NSDC Response

NSDC followed and complied with the statutory requirements prescribed under the then existing Companies Act,1956 for converting from Public Limited Company to Private Limited Company.


NSDC Board approved the Conversion subject to approval from Shareholders in its 15th Board Meeting held on 5th July, 2010. Thereafter the matter was placed before shareholders of NSDC in the Second Annual General Meeting held on 14th September, 2010 wherein the Special Resolution which require 3/4th Majority was passed approving the conversion. NSDC thereafter duly applied to Ministry of Corporate Affairs for approval. NSDC duly got ‘Fresh Certificate of Incorporation’ on 8thJune, 2011. This certificate was placed in the 23rd Board Meeting of NSDC held on 29th July, 2011 wherein the Board took note of it. The Government nominees on NSDC Board, including the director nominated by Ministry of Finance were present during the AGM and also during the Board Meeting.    

How does NSDC remain accountable to Government of India?

 NSDC at regular intervals submitted data to the PM’s National Council for Skill Development and subsequently to the National Skill Development Agency (NSDA), as well as to the Ministry of Finance.

 

Since the formation of Ministry of Skill Development & Entrepreneurship (MSDE), NSDC has been sharing regular updates/information with the Ministries mutually agreed. The annual disbursement to NSDC are only made after the work plan and projected disbursement is shared with National Skill Development Agency under MSDE. Apart from this, NSDC has promptly provided responses to all the queries received from MSDE, NSDF and NSDA from time to time. NSDC also cooperated and provided all the information requested by the CAG auditors.

What was the selection process for appointing MD & CEO, NSDC?

MD & CEO was selected through a transparent process which involved leadership search firm Egon Zender Intl Pvt Ltd and a search committee comprising of Mr. M. V. Subbiah (then NSDC Chairman), Ms. Sudha Pillai (Government nominee on NSDC Board) and. Mr. Anurag Jain (private sector representative on NSDC Board). The search committee identified Mr. Chenoy then Director General (DG) of SIAM as a potential candidate and a request was made to SIAM to release its DG. Mr. Chenoy was appointed to serve as MD & CEO NSDC on terms agreed by the board.

 

The decision to hire a CEO was taken in a meeting with the apex Chamber of Industries and Commerce, chaired by the Hon’ble Finance Minister. It was recommended that NSDC Board will appoint a Chief Executive Officer (CEO) through an open selection process. Further NSDC Board in its 13th Board meeting held on 30th March 2010, discussed and approved the appointment of MD & CEO of NSDC.

Since the CEO came from the Private sector how was his remuneration decided?

The Remuneration Committee recommended the salary of the CEO which was then approved by the Board on 30th March 2010 and the Extraordinary General Meeting held on 7th May 2010 ratified it. Subsequently the salary of the CEO was approved by the President of India, the Central Government and by the concerned Ministry of Corporate Affairs.

What is the National Skill Development Fund?

National Skill Development Fund (NSDF), fully owned by the Government of India was set up as a Trust in December 2008 under the Indian Trust Act, 1992 with an initial corpus of Rs. 995.10 crore received from the Government. The Trust was to act as the repository of funds for NSDC from Government Sources, bilateral/multilateral and other agencies/donors. NSDF is currently led by a joint secretary at MSDE as Chief Executive Officer.

What is the management structure of NSDF and the role of NSDC Chairman at NSDF?

NSDF was a set up as a trust with trustees comprising Secretary DEA, Foreign Secretary, Secretary Planning Commission, Chairman of NSDC and the Industry Representative who had to be nominated by Government of India. The nominations were made with the approval of the Cabinet.

 

The supervisory role of NSDC by NSDF is independent of the composition of the Board. The decisions of the Trust are taken by the Trustees collectively and not by any individual member. The Chairman, NSDC is appointed by the Government and as member of the NSDF, he takes initiatives to mobilize funds from bilateral and multilateral sources. NSDF was also mandated to raise private sector investment in the space of skill development. The CEO of NSDF is the joint secretary at MSDE. There is no conflict on the overseeing role of NSDF and relationship between NSDF & NSDC.

What initiatives are taken by NSDC to raise funds from other multi-lateral/bi-lateral agencies?

The responsibility of raising private sector funding was allocated to National Skill Development Fund (NSDF), which is under the Ministry of Skill Development & Entrepreneurship (MSDE) and led by a Joint Secretary from MSDE.

 

With regards to NSDC, for every proposal funded by the organization, 25% is invested by the training organization and 75% is funded by NSDC in form of soft loan at 6% interest rate. For the Rs. 810 crore disbursed by NSDC (as of 31st March, 2015), the private sector/training organization invested Rs. 215 crores in scaling up their training capacity. Apart from this, NSDC Board has also approved 21 non-funding proposal who will invest Rs. 122 crore over the next 10 years for various skill development activities across the country.

 

In the past, the World Bank, ADB, DFID and other multi-lateral and bi-lateral agencies have shown interest in funding NSDC. However, it was decided by the Ministry of Finance, that as long as the government is committed to fund NSDC, no multi-lateral/bi-lateral funding should be sought. Proposals exclusively for technical assistance from multi-lateral/bi-lateral agencies could be considered by NSDC.

 

Since then, ADB has committed USD 100 million each in the state of Meghalaya and Kerala for skill development programs. Both projects are already underway and NSDC and Sector Skill Councils are involved in the same. NSDC also facilitated a MoU between DEA and DFID signed on 23rd August 2013 for GBP 4.5 million. The skills development project was successfully concluded.

What is the relationship between NSDF & NSDC

NSDF is responsible for monitoring supervising and regulating NSDC. The agenda for every NSDC Board meeting and the minutes are always circulated to the CEO of NSDF. NSDC submit all the documents and information sought by NSDF from time to time which included annual work plan submission, yearly audited accounts, budgets for the upcoming year, utilization certificates of the funds and performance report, along with a presentation by MD & CEO NSDC to the trustees of NSDF on periodic basis.

How are directors appointed at NSDC?

The central government is entitled to have six directors including the chairman on the board of NSDC. The article of association of NSDC also includes one board member who will represent and recognizes skill training institute to be nominated by the government. This is as per the Cabinet approval of November 2008. The Cabinet has also defined terms for nominating a person from the private sector

How are procurement and expenditure guidelines followed by NSDC?

The NSDC follows the highest standards of governance in its daily operations and reporting. To ensure good corporate governance NSDC follows the Financial Management and Procurement Manual which is approved by its Board based on suggestions and comments from the Ministry of Finance. All proposals have been approved only after the manual was approved and adopted by the Government of India. These documents are available on NSDC website for perusal.

How does NSDC ensure achievement of training targets of funded partners?

NSDC has always exceeded the targets year on year since inception. NSDC’s aim is to create capacity in a sustainable manner for an overall portfolio NSDC has achieved its target at greater monetary efficiencies. The funding to the partners is based on achievement of targets and is be paid in tranches spread over the project period based on compliance and achievement. All disbursements are made based on achievements of milestones which are mutually agreed with NSDC.

Financial year

Training Target

Training Completed

Achievements %

2010-11

20,000

20,484

102%

2011-12

1,20,000

1,81,691

151%

2012-13

4,00,000

4,02,506

101%

2013-14

10,00,000

10,05,074

101%

2014-15

33,00,000

34,42,422*

104%

 

*Also include people trained under STAR and Udaan scheme

How many people have been placed by NSDC since inception?

Financial year

Training Completed

Placement

Achievements %

2010-11

20,484

14,399

70%

2011-12

1,81,691

1,44,238

79%

2012-13

4,02,506

216,889

54%

2013-14

10,05,074

6,47,188

64%

2014-15

20,36,570*

12,28,299

60%%

Total

36,46,325

22,52,013

62%

 

*Does not include 14 lakh+ people trained under STAR scheme. Since the scheme did not mandate placement, the same was not tracked. For trainings done outside STAR, the cumulative placement is 62%.

What is the investment framework for surplus resources at NSDC?

As of 31st March 2015, about 65% of Rs. 1,244 crore received from NSDF had been disbursed for various skill development projects under NSDC. NSDC prepared and submitted its yearly budget to NSDF for approval and further disbursement is made on the basis of committed and approved disbursement. This is as per agreement with NSDF. Since grant received by NSDF was tied up against existing commitment, keeping this money in long-term investment can adversely impact the skill development agenda, which could adversely impact the funding requirement of NSDC partners.

 

As an Investment policy, the surpluses fund is placed in an interest bearing fixed deposit account for short to medium term to ensure security and liquidity as per NSDC Board recommendation. The NSDC has diligently followed the above recommendation.

 

A quick glance on committed disbursement is as follows:

Particulars

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Total

Funding Commitment 

(in Rs. crores)

15

177

397

586

555

467

2197

Is there a mechanism to monitor the targets?

NSDC had developed a Skill Development Management System (SDMS) and is in process of implementing a Business Intelligence tool to monitor the targets on periodic basis with the help of an independent professional monitoring agency. In addition there are constant meetings and dialogues through emails, phone calls, video conferencing, centre visits by NSDC managements for periodic course correction as necessary.

Does the capacity created by NSDC partners’ benefits other government schemes?

NSDC has been funding as ‘Project Finance’ for creation of institutional training capacity in the country. This training capacity is also being used by other skill development programs under Central Ministries and State Governments. Therefore, NSDC makes a greater contribution to India’s skill ecosystem than the training numbers. The capacity created by NSDC partners is also benefiting government schemes such as NULM, Aajeevika (DDU-GKY), MANAS, MES etc. Numbers from these trainings are not being reported to NSDC, but benefit the larger eco-system.

Does the government monitor NSDC targets?

NSDC at regular intervals submits data to the PM’s National Council for Skill Development and subsequently to the National Skill Development Agency, as well as to the Ministry of Finance.

 

Since the formation of Ministry of Skill Development and Entrepreneurship (MSDE), NSDC has been sharing regular updates/information with the Ministries mutually agreed.

How does NSDC deal with partners who default?

All the NSDC partners are selected after rigorous due diligence, however necessary procedures are adopted in case of default. While, there may have been delays in repayment in a few cases, payments have subsequently been received through continuous Monitoring and follow-ups. There have been four such instances of defaulters and actions have been taken to obtain repayments. Three of the cases have been resolved and legal action has been taken against the fourth.

How does NSDC monitor funded partners?

NSDC Board has approved the scientific methodology of monitoring sample data based on recommendation of internationally reputed consultants and executed by a 3rd party. In addition regular site visits are conducted by NSDC staff and management team. The learning from the system and the observations of the audit are incorporated in the process, to ensure rigorous monitoring at all levels.

Are site visits conducted regularly to monitor partners?

NSDC for its monitoring function has an independent monitor/Monitoring Agency, who visit the centre on a regular basis. Other NSDC and Government officials have also visited various NSDC Partner centres, besides the usual centre visit by Project Monitor and NSDC monitoring team. Over the past couple of years there has been an increased focus on centre visits.

How frequently does NSDC Audit the Projects?

NSDC conducts management audit of all the training providers at least once in two years. However, in select cases more than two audits have been conducted within two years from the date of disbursement. Till date, audit committee reports have been closed to the satisfaction of auditor.

How do I obtain funding from NSDC for skill development initiatives?

NSDC calls for proposals in select areas (sectors/utilities) from time to time. To receive funding, an organisation needs to submit a proposal in response to the call for a proposal. The proposals are invited from private players, industry bodies, entrepreneurs and NGOs in a prescribed template.

Once the organisation receives a proposal, it will be evaluated thoroughly. It will be accepted for funding based on the organisation’s evaluation and is subject to clearance by the NSDC Board.

After the funding is granted, NSDC will continuously monitor the use of funds, the progress of the project and its impact on skill development. To know more about the proposal evaluation process, click here.

What is the proposal evaluation process?

On receiving a proposal, NSDC will adopt a phased and detailed due diligence process. Detailed evaluation will be done across pre-defined sets of criteria. Among other things, proposals are evaluated based on the following guidelines:

  • Sustainability of the business model in the medium to long-term
  • Partnerships with prospective employers, state governments and
    financial institutions.

To know more about the criteria for evaluating proposals, click here.

What are the criteria for consideration of proposals?

NSDC seeks proposals that target scarce skill sets or student populations with huge unmet needs and focuses on large-scale, high-quality training institutes.

 

Technology and Innovation

NSDC is keen on promoting development of innovative models in the skill development space. Hence, proposals that include a pioneering business plan and can have a “multiplier” effect in skill development and/or engage unique technology to transfer skill development to trainees are actively sought, e.g. simulation
technology pedagogy.

 

Use of Existing Infrastructure

Proposals that deploy operating plans which leverage use of existing infrastructure are encouraged. Hence, proposals that intend partnerships with any existing training centers e.g. ITIs and ITCs will be looked at with special interest.

Besides, the organisation takes into consideration the following guidelines while evaluating proposals:

  • The proposal should preferably identify and target the most important skill development gap in a sector/region
  • It should aim to cover a significant portion of the priority target segment
  • The proposal should not expect NSDC to fund 100% of the total project cost
  • It should preferably not expect  NSDC to fund the entire amount as a grant
  • The proposal should preferably be in the following priority sectors identified by the Planning Commission:

Industry

  • Automobile/auto component
  • Electronics hardware
  • Textiles and garments
  • Leather and leather goods
  • Chemicals and pharmaceuticals
  • Gem and jewellery
  • Building and construction
  • Food processing
  • Handlooms and handicrafts
  • Building hardware and home furnishings.

Services

  • Transportation/logistics/warehousing, and packaging
  • Organised retail
  • Real estate services
  • Media, entertainment, broadcasting, content creation, animation
  • Healthcare
  • Banking/insurance and finance
  • Education/skill development.

What entities are eligible for funding?

The following is an indicative list of entities that are eligible for funding:

  1. Industry
  2. Training & skill development organisations
  3. Non-governmental organisations (NGOs)
  4. Business associations
  5. Social entrepreneurs.

Where should funds obtained from NSDC be utilized?

The funds obtained from NSDC cannot be utilized for land acquisition and / or for the construction of buildings. NSDC promotes the use of existing infrastructure and would like the funds provided to be used solely to meet expenses related to training and skill development.

 

I'm an entrepreneur. Am I eligible for funding?

Yes. However, funding depends on the quality of the proposal. Click here to know more about the criteria for funding.

How can NSDC help me train my employees?

NSDC will not carry out any training or skill development interventions directly. However, we will enhance, support and coordinate initiatives for training and skill development, while providing financing.

What type of support can the NSDC provide to my organisation?

The NSDC looks at loan or equity funding depending on the type of proposal. The terms and conditions will be further defined after studying the details of the proposal.

I'm a skill training institute. Am I eligible for funding?

Yes. The funding depends on the quality of the proposal. Click here to know more about the criteria for funding.

Can we combine our existing training module with NSDC training?

The existing training can be carried on separately.  However, to  combine  it with NSDC training, you will need to align the modules with QP/NOS and also meet other training guidelines as per respective SSCs. Click here to know more about existing QP/NOS or click here to know more about the SSCs.

 

What type of support can the NSDC provide to my organisation?

The NSDC looks at loan or equity funding depending on the type of proposal. The terms and conditions will be further defined after studying the details of the proposal.

Where can I get more information about the NSDC?

Click on the following links to know more about the NSDC’s services and its organisational set-up: About NSDC, Our RoleOur Work.

For further information, please send an email to proposals@nsdcindia.org.

What is NSDC and why was it formed?

NSDC is a first-of-its-kind Public Private Partnership (PPP) in India set up to facilitate the development and upgrading of the skills of the growing Indian workforce through skill training programs. NSDC was formed in the financial year 2008-09 with a single agenda of skilling 150 million people by 2022 by fostering private sector initiative in skill development. This is part of the National Skilling Mission that target to skill 500 million people by 2022. The 350 million outside NSDC scope is being handled by 19 central ministries i.e. Ministry of Labour, Ministry of Rural Development etc. By far the single largest chunk of the National Mission is currently being handled by NSDC. The skills training provided under the NSDC programme helps the individual with hands on training on the skill of his choice and increases his chances of employment in the industry. It is imperative for us to bridge this gap between theoretical and practical knowledge.

How does NSDC function?

NSDC is a not-for-profit company set up by the Ministry of Finance, under Section 25 of the Companies Act. It has an equity base of Rs 10 crore, of which the private sector holds 51%, while the Government of India controls 49%. This makes NSDC a one-of-its-kind public private partnership in education in India.
The corporation has a tiered structure - a 14-member Board and the National Skill Development Fund (NSDF), a 100% government-owned trust -which work in sync to fulfill the NSDC’s strategic objectives.

Why has NSDC decided to work with the private sector in developing skills?

NSDC is a very unique model and a new experiment in its own way through which we expect to have a skilled nation. Skilling, in the past have always been the prerogative of the government. Since 2009 we have started to see this from a demand side as well – that is what the industry needs. By forming a public private partnership with majority held by private sector we have managed to create a more sustainable model. This is in a way a virtuous cycle. Good quality skill will always be in demand in the industry and good quality comes with a certain price and the price has to be good enough for the skilling institution to sustain it in the long run. What will spiral this virtuous cycle into whole new sphere is when employers start to see the inherent long term value in hiring skilled people and insist on hiring manpower branded by NSDC.

Why is it important to the Indian economy to improve skills?

To have the adequate number of skilled people in the country is not just important BUT ESSENTIAL for the future of India’s economic progress. By 2025 India’s population is expected to exceed that of China, making India the world’s most populous country. Today if you look at the economic growth around the world since industrial revolution there is a certain level of parity being achieved in terms of technology and consumption pattern. What will make or break a country’s future is the adequate supply of skilled manpower. We have done skill gap studies for 20-odd fast growing sector that are considered crucial for the economic welfare of India. In each of these we are expecting to see massive demand for incremental skill manpower. All three sectors - manufacturing, service and agriculture are likely to feel skills shortage that cannot be addressed overnight.

Please explain the work is done under the NSDC Star Scheme?

The National Skill Certification and Monetary Reward Scheme, branded as STAR, aims to motivate 10 lakh young people to voluntarily join the skilling program across the country. The scheme was first announced by Honorable Finance Minister in budget speech of 2013, allocating Rs. 1,000 crores for the scheme, which he further launched on 16th August 2013. The scheme was run on a pilot mode for the first month and was subsequently launched across India on 16th September, 2013.

 The STAR Scheme is promoting a paradigm shift from content-based to outcome-based courses that are aligned to industry formulated national occupational standards. The scheme is targeting to skill 80% of the entry-level workforce required in various sectors to fill the prevailing skills gap, and will initially cover limited number of high-market-demand job roles from Levels 1 to 4 in the NSQF. Currently, a total of 204 Job Roles are part of the Scheme under 16 Sector Skill Councils (Agriculture, Automotive, BFSI, Capital Goods, Construction, Electronics, Gems & Jewellery, Health, IT-ITeS, Media & Entertainment, Leather, Plumbing, Rubber, Retail, Security, Telecom). For more information visit www.nscsindia.org

How has NSDC planned the skilling of 150 million people by 2022?

A target of 150 million is definitely a big challenge. However it is not an impossible task. The first four to five years of our mission that started in 2009 is to build skilling capacity. We at NSDC have taken a very different route by creating sustainable for-profit skilling ecosystem where private entrepreneurs are coming forward to establish skill imparting centres. In that sense we are a fund manager, provide soft loans and in some cases even equity to build this ecosystem. The overarching idea is to provide sufficient financial incentive in the form of a fairly reasonable term loan to entrepreneurs to invest in the skilling business. In the first three years of operations, NSDC Board has approved 129 skilling ventures creating a capacity of training 78 million people over next 10 years. Till 31st March, NSDC partners have training nearly 2 million people. We achieved our target of training 1 million people for FY 13-14, which has now scaled up to 3.3 million for FY 14-15.

What measures is NSDC taking to make skills training a successful venture in India?

NSDC has identified some of the key challenges in the skilling space and is working closely with different stakeholders to address the same:

Student Mobilization: This is one of the key issues that our partners are facing currently. This issue is mainly due to two factors i.e. ability to pay and willingness of the students.

Ability to pay: NSDC has tied up with several banks to provide loans to students for pursuing skills training programs. The GOI has also launched the STAR (Standard Train Assess and Reward) scheme on 16th August, 2013. The scheme on an average will provide a monetary reward of Rs. 10,000 to students who will undergo skills training, and receives a certificate after assessment by an independent agency appointed by the SSC.

Willingness: NSDC has launched a marketing campaign to make skills training aspirational amongst the youth of our country. The social media activation has also started. We are also exploring avenues like outdoor campaigning, mobile SMS etc. to reach out to our target audience

Lack of information: NSDC is conducting district-wise skill gap studies across the country. Studies in 27 states are already completed, while studies in 2 other states are in progress. We are also conducting a revised sector-wise skill gap study to identify the shortfalls in the changing economic environment. Also methods to inform the youth about the opportunities are being explored and would be launched shortly. For more information click here.

Standards & Quality: The SSCs have standardized 742 job roles through 2027 National Occupational Standards in 20 different sectors. The more are in process. This would lead to standardization and ensure quality of vocational training programs across the country.

Engagement of employers: NSDC is actively engaging with the employers to recognize skills and provide incentive to the skilled manpower.

Innovation: NSDC is also working on several innovative models to develop the skilling eco-system. The various technological interventions i.e. simulators, satellite training centres etc. will help in ensuring quality and reducing cost.

International Collaborations: Apart from the above, NSDC is also engaging with its counter-parts in other countries i.e. Germany, UK, Australia and others, to implement the best practices in the skilling space from all across the world.

What are the focused sectors for NSDC in imparting training and providing skill development?

NSDC is focusing on 20 high priority sectors and the unorganized sector. However our focus is not limited to these sectors alone.

  • Automobile / auto components
  • Electronics hardware
  • Textiles and garments
  • Leather and leather goods
  • Chemicals and pharmaceuticals
  • Gems and jewellery
  • Building and construction
  • Food processing
  • Handlooms and handicrafts
  • Building hardware and home furnishings
  • IT or software
  • ITES-BPO
  • Tourism, hospitality and travel
  • Transportation/ logistics/ warehousing and packaging
  • Organized retail
  • Real estate
  • Media, entertainment, broadcasting, content creation, animation
  • Healthcare
  • Banking/ insurance and finance
  • Education/ skill development
  • Unorganized sector

Accessibility to skill development programmes continues to be a major hurdle. How are you creating awareness on government programmes?

Our accessibility has three sub-parts to it.  One is awareness, two physical accessibility that would not force trainees to travel very far to acquire a new skill and last but not the least is affordability.

We are currently running a nation-wide awareness campaign that practically touches every form of media—print, TV, social media, radio etc.  These are happening in phases. We also have a unique helpline number – 088000 55555 – that trainees can call to get information on different skilling programs available in 2800+ training centers present in 350+ districts across the country.

Apart from STAR scheme which incentivize people for getting skilled, we have also tied up with several banks and micro financing organizations to provide funding assistance to the youth for getting skilled.

For Media Enquiries

Ankush Chhabra

Analyst – Communication & Advocacy

Block-A, Clarion Collection,

(Qutab Hotel) Shaheed

Jeet Singh Marg

New Delhi-110016

Email: ankush.chhabra@nsdcindia.org

T: +011-47451600-10 Extn 322

F: +91-11-46560417