National Skill Development Corporation (NSDC) is a not-for-profit public limited company established on July 31, 2008, as a Private Public Partnership (PPP) model by the Ministry of Finance. The Government of India under Ministry of Skill Development and Entrepreneurship (MSDE) is obliged to get 49% of the share capital of NDSC, and private sectors get the remaining 51% share. The organization provides funds to build scalable and profitable vocational training institutions. NSDC acts as a catalyst by rendering funds to enterprises, companies and organizations that provide skill training. Moreover, innovative models have been developed to enhance, support and coordinate private sector initiatives.
The organization contributes significantly to the overall target of skilling up of people across the nation by fostering private sector initiatives through skill development programmes. It enables support system that emphasis on quality assurance, information systems and train academies either directly or through partnerships.
The mission of NSDC is to
- Upgrade skills to international standards and develop mandatory frameworks for curriculum, standards and quality assurance.
- Enhance, coordinate and support private sector initiatives for skill development through appropriate Public-Private Partnership (PPP) model and strive for significant financial and operational involvement from the private sector.
- Acts as a ‘market-maker’ by bringing funds to sectors where market mechanisms are lacking or ineffective.
- Prioritize initiatives that can provide multiplier or catalytic effect as opposed to one-off impact.
NSDC was established as part of a National Skill Development Mission to meet the growing requirements in India for skilled human resources and narrow the existing gap between demand and supply of skills.
The NSDC takes initiatives that can potentially have a developing effect, rather than being an actual operator in this field. Through this approach, the organization attempts to involve the industry in every aspect of skill development. The approach aims to develop partnerships with multiple stakeholders and build on current efforts instead of undertaking various initiatives directly or duplicating the efforts. To expand the necessary efforts to achieve the objective of skilling/up-skilling 150 million people, the NSDC strives to
- Develop low-cost innovative business models
- Attract significant private investment
- Ensure funds are re-circulating
- Create leverage for itself
- Build a strong corpus
National Skill Development Corporation plays three key roles that are
- Funding and incentivising
- Enabling support services
Funding and Incentivising
This includes providing loan/equity, grants and supporting financial incentives to select private sector initiatives to improve financial viability through tax breaks. The exact nature of funding (equity, loan and grant) depends on the viability or attractiveness of the segment and to the type of player, for-profit private, non-profit industry association or non-profit NGO. Gradually, NSDC aspires to create strong, viable business models and reduces its grant-making role.
Enabling Support Services
A skill development institute requires several inputs or support services such as curriculum, faculty training standards, quality assurance, technology platforms, student placement mechanisms etc. NSDC contributes to these support services to set up standards and accreditation systems in partnership with industry associations.
NSDC proactively provides momentum for large-scale participation by private players in skill development. NSDC identifies critical skill groups, develop models for skill development and attracts potential private players.
Features of Funded Affiliation
Any legal entity not limited to company/society/trust according to the process and applicable laws and guidelines are eligible for this funding. The funding meets requirements for training infrastructure and working capital.
Interest Rate: 6% p.a.
Principal Moratorium Period: Up to three years
Interest Moratorium Period: Nil
Repayment Period: Seven years
- Minimum 15% of the required investment (not-for-profit entities)
- Minimum 25% of the required investment (for-profit entities)
- The first charge on assets of the project
- The first charge on cash flows of the project
- The first charge on IP developed under the project
- Personal guarantee/corporate guarantee/Put-option in another associate company
- Pledge shares were a minimum of 51% of the equity of the project implementing entity (for-profit entities)
- Pledge letters to be taken (non-for-profit entities)
- Post-dated cheques
- Hard collateral (including bank guarantee/mortgage of immovable property/lien on fixed deposits etc.) covering a minimum of 30% of the loan amount
Features of Non-Funded Affiliation
NSDC incorporates reputed entities with established credentials willing to be the part of Skill India or Make in India Mission, can still be a partner without requiring funding. Proposals that are submitted have to be robust, catering to sectors with high growth, unmet needs or unorganized sectors. However, proposals must be outcome-oriented and should focus on placement in industry, self-employment and entrepreneurship.
- An entity with more than five years in operation with sustainable growth.
- For an entity that is listed in BSE/NSE with more than five years with sustainable growth with a credit rating of A- and above, separate TOR and due-diligence process may be applicable.
- A not-for-profit entity that has more than five years of sustainable growth.
- For a not-for-profit entity that is already funded by World Bank, ADB, MSDF, UNDP etc. or foundation/social ventures of large corporates, a separate TOR and due-diligence would be applicable.
- A minimum of 2,000 over three years with placement commitment of 70% (corporates)
- A minimum of 5,000 over three years with a placement commitment of 70% (not-for-profit)
- Approves projects required to adhere to the tenets of the NSDC monitoring system.
- A proposal has to focus on linkages with industry for training and placement, livelihoods, self-employment, entrepreneurship or upskilling.
- Courses have to be aligned to specific SSC QOP/NOS.
- On achieving 70% of the committed target, the partnership would be renewed automatically every year.
Step 1: Test of Responsiveness
Step 2: Proposal Evaluation Committee (PEC) that consists of members internal to NSDC
Step 3: Proposal Approval Committee (PAC) where there is diverse representation from Government, private sectors, NGOs and industry.
Step 4: Representatives of key stakeholder both Government and private sector.
Pradhan Mantri Kaushal Kendra (PMKK)
The Ministry of Skill Development and Entrepreneurship is working towards establishing visible and aspirational model training centres in every district of the country. These training centres are the Model Training Centres (MTCs) called Pradhan Mantri Kaushal Kendra. The programmes under MTCs aim to
- Generates benchmark institutions that demonstrate aspirational value for competency-based skill training.
- Focus on elements of equality, sustainability and connect with stakeholders in skills delivery process.
NSDC provides concessional loan funding per centre, up to 75% of the project investment to cover expenditure that is related to
- Training infrastructure including the purchase of plant, machinery and equipment
- Training aid and other associated items
- Civil work that includes setting up prefabricated structures and retrofit existing structures
The sustainability of the centres would be assured against the dedicated training numbers under PMKYY or its succeeding schemes under MSDE to NSDC. Every PMKK has assured training for three years as per the norms that are subject to capacity and utilization of the centre.
Schemes and Services Rendered
- International Skill Training
- Technical Intern Traning Program (TITP)
- Takshashila, a National Portal for Trainers and Assessors
- Kaushal Mart allocated as Skilling Resource Marketplace
- Kaushal e-Pustakalaya
- Entrepreneurship Support Initiatives
- Rozgar Mela