Monday, November 16, 2015

The Disquiet at NSDC

Finally, the penny drops. The so-touted worlds most high profile skilling mission stumbles. After a highly critical audit report, several top executives of India's National Skill Development Corporation (NSDC) resigned. The audit report highlighted a number of things, most crucially various areas of management failure, and that may have triggered the change. But it also crucially pointed out that more than 99% of all funding of this public-private partnership is coming from public funds, and there is indeed no accountability in how it is being spent. 

In summary, the government has finally caught up with what almost everyone else knew. That the much vaunted skills mission was a non-starter, a colossal waste of public funds which made a few dishonest businesses rich. One could justifiably claim that this was one of the pet projects of the previous government, and they must shoulder the blame of its failure. And, they should, having set the body up without any plans and ideas. However, it hurts the current government in a way too, as it has no alternative ideas on the table. The personnel change, perhaps appropriate, is not going to solve the deeper malaise of lack of ideas.

I have always been critical of NSDC and its way of doing things, and argued that NSDC type initiatives essentially undermined, rather than encouraged, the spread of vocational training in India. My argument was that vocational training made significant headway in India, as private enterprises identified underserved vocational markets (IT training, hospitality training, tourism training etc) and built offerings without the government stepping in. But, since 2008, this private market mechanism was completely distorted by the intervention of the government with capacity-building funds, which often went to crony companies, and created inefficiencies. Besides, this government money was spent under the strange doctrine that this needs to go into capacity creation, while the existing capacity, in the form of government supported schools, colleges and industrial training institutes, requiring maintenance and upgrades, were ignored. There was no explanation why public money was handed out to private businesses to create capacity when public capacity existed and was ignored, except that this was a way of making money for some well-connected individuals and companies.

The crisis at NSDC - and indeed one should call it a crisis when the top two executives had to resign - has been kept a low profile. This is surprising, given the prominence every little pronouncement about skills is given in India. So far, this is projected as a management failure, followed by departure of responsible executives. The systemic failure, quite apparent to all observers and pronounced in the audit report, has not been examined adequately. But this is what should happen now - not just the search for a new team, but an interrogation of what really went wrong.


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