Beyond Patchwork Reform: Making Skilling an Industry
The recent proposal by NITI Aayog to reset the skilling landscape with a focus on outcome-linked financing and Public-Private Partnerships (PPPs) is a acknowledgment that the status quo is insufficient. However, we must address the elephant in the room: for over a decade, the government has set ambitious targets—aiming to skill hundreds of millions of youth—yet the achievements remain vastly disproportionate to the scale of the challenge.
Despite a decade of initiatives, the "skill gap" remains a persistent drag on our economic potential. We have seen countless programs launched with great fanfare, but the translation into gainfully employed, highly skilled workers has been minimal. The reason is structural, not operational.
The Failure of the Current Model
The state-led approach to skilling has failed to achieve the necessary momentum. We have spent years "talking" about skilling 500 million youth, yet the actual numbers of individuals successfully and productively skilled remain abysmally low. This isn't a failure of intent, but a failure of market dynamics. Skills training, when controlled by the government, remains isolated from the real-time, profit-driven demands of the industry.
My Recommendation: Privatize and Professionalize
In light of this chronic underperformance, my long-standing recommendation assumes urgent importance: we must give "Skilling" the status of an Industry.
Just as the privatization of school and college education unlocked massive infrastructure and quality improvements, the skilling sector must be opened to private enterprises. We need to create an environment where private players are incentivized to set up thousands of Industrial Training Institutes (ITIs) with the express goal of making them profitable, sustainable entities.
In my past communications, I have outlined a concrete path to achieve this:
- Treat ITIs as Infrastructure SPVs:
- We should incentivize the establishment of training centers by treating them as Special Purpose Vehicles (SPVs) for infrastructure.
- The "Amnesty" Incentive:
- o attract immediate capital, we should remove barriers regarding the source of funds for setting up these institutes—effectively creating a transparent pathway for private investment.
- Email - "DEAR PM : HERE IS HOW TO INVOLVE PRIVATE SECTOR TO TRAIN 10 MILLION PER YEAR" - 01 Sept 2023
- Blog - "Apprenticeship Scheme : Details Tally" - 03 Feb 2023
- Direct Benefit Transfer (DBT):
- Instead of bloated administrative machinery, provide a direct government grant per trainee to these private SPVs. This ensures accountability and creates a clear performance-linked incentive.
If we offer this level of freedom and incentivization, I am confident that we will see 10,000 such private SPVs emerge within a single year, effectively training 10 million youth annually.
The government’s role should not be to "run" skilling, but to create the regulatory "marketplace" that allows the private sector to flourish. Until we treat skilling as a profit-making, industry-driven venture rather than a social welfare scheme, we will continue to fall short of our national potential. It is time to stop playing with "half-hearted measures" and unleash the private sector to do what it does best: scale, innovate, and deliver results.
Sources
| # | Title | Date | About |
|---|---|---|---|
| 1 | Apprenticeship Scheme : Details Tally | 2023-02-03 | Proposes treating training institutes as infrastructure SPVs with amnesty and DBT incentives. |
| 2 | DEAR PM : HERE IS HOW TO INVOLVE PRIVATE SECTOR TO TRAIN 10 MILLION PER YEAR | 2023-09-01 | Reiterates the SPV/amnesty/DBT model to rapidly scale up national training capacity. |
| 3 | NITI Aayog proposes skill reset with focus on outcome-linked financing, PPPs | 2026-08-20 | Reports on NITI Aayog's new strategy to reform skilling through financing and partnerships. |
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