Upskilling 150 Million People


The Economist recently ran a special report on India which was highly informative. I particularly found “A Billion Brains” to be a great summary of the education scene in India. One aspect called out in the article was the humongous skill gap that we have in India.

Here is the gist of it. The current annual demand for skilled labor in India can employ 100% of the population entering employable age. But only 4 MM people (2.8 MM through higher education and 1.2 MM through vocational training) are getting any sort of formal training while 17 MM trained labor is required every year. Majority of graduates study humanities (2.5 MM) and hence have to be trained on the job. The following slides share more details on the demand for labor across sectors and the supply side issues.

Skill Gap In India

Given the above context, the efforts of the National Skill Development Corporation (NSDC) to upskill 150 MM people by 2022, is quite commendable. Here are some highlights from my conversation with NSDC on this topic.

  • Goals: They have 20 identified sectors (plus the unorganized sectors) on which they have tons of market information they have shared via this knowledge bank. They have approved 77 projects so far (61 in training/upskilling and 16 for sector skill council ventures)
  • Criteria for selection: a) Main focus is the ability of the funded project/company to upskill/train a minimum of 100K people in 10 years (this number could be across sectors – same company training IT, Hardware, etc.). b) 70% of the trained people should be gainfully employed. c) And the company should have a robust 10 year business plan
  • Structure of the funding: No specific cap on the funding. They will fund 75% of project cost (without land and buildings). Money is given out in tranches. Mostly as loans – 6% interest (could have an interest moratorium of 2-4 yrs)
  • Stage of the company: They are open to funding from early stage startups to mature companies (as shown in the table below. But, it helps to have some early proof points on how the model will work
  • Sectors: They are keen to fund projects across all 20 identified sectors but seem to have more of an appetite for non-IT projects to balance out their portfolio

The table below summarizes the list of projects they have listed on the website. As you can see, these listed projects aim to upskill about 70 MM people over 10 years and on an average each project upskills about 1.4 MM people at a cost of Rs 36 Crores over 10 years.

NSDC Projects

For startups out there in the training/skills development space (particularly non-IT), NSDC could be a great way for you to get non-dilutive funding for scaling up your operations. If you are a company that has gone through the NSDC process, it would be great if you can share your experiences/tips for other aspiring skills development startups.

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