New Delhi: The Union government will disburse around Rs7,000 crore to states to help align them with the centre’s skill development agenda and persuade them to create an ecosystem of entrepreneurship for youngsters.

The ministry of skill development and entrepreneurship is meeting state skills and labour ministers on Wednesday in New Delhi to draw a road map on it and discuss hand-holding measures it is ready to offer to the states.

The ministry is taking soft loan of $1 billion (nearly Rs6,660 crore) from the World Bank for skill development initiatives and most of the amount will be disbursed to states, according to an internal ministry document. Mint has reviewed a copy of it. Besides, it will disburse some Rs3,000 crore or 25% from the funds earmarked for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), a flagship skill development scheme of the Union government to train 10 million people over the next four years. The Union cabinet has already approved about Rs12,000 crore for PMKVY earlier this year.

At least two government officials with knowledge of the development said the ministry feels that the centre will not be able to achieve the target of skill development all on its own and taking states along will be the key. The above amount of funds will flow to states over the next three years. India wants to skill train some 500 million people by 2022 but has been largely behind the curve in last five years. Baring 2013-14, the skill development initiative has fallen short of target each year between 2011-12 and 2015-16 as per official data.

“Skilling India is a mammoth task which can not be achieved without whole hearted cooperation of the states...It is necessary to empower the skill development missions, so that they are able to operate as effective nodal bodies which can anchor the skill development agenda in the state," skills minister Rajiv Pratap Rudy has written in his letter to each of the state governments. Mint has reviewed a copy of the letter as well. Rudy in the letter has written that his ministry has “comprehensive plans for continuous engagement with states" on Skill India mission.

In the meeting, the ministry will urge states for leveraging private sector spending in skills, devise common norms for skill training in states, and persuade them to create an entrepreneurship ecosystem for youngsters. It will ask states to start entrepreneurship hubs so that technical institutions can link up with these hubs for both mentoring and financial handholding.

Besides, the ministry is likely to seek the support of states for creation of some 3000 entrepreneurship centres including 2,200 at college and universities, 300 in senior secondary schools and 500 at Industrial Training Institutes over the next five years. Meanwhile, the Union government has decided to help national skill development corporation branch out to 12 states including Gujarat, Bihar, Assam, Karnataka and Tamil Nadu to oversee the skill initiative from the ground.