A lot of the National Skills Development Corporation (NSDC) initial loans of around Rs1,500 crore has turned into non-performing assets (NPAs), skill development minister Rajiv Pratap Rudy said in an interview. Rudy said the NSDC model has serious flaws which he is correcting. He also spoke about the skill ecosystem, and the government’s inability to ensure a salary premium for skilled manpower. Edited excerpts:
What’s the key achievement of your ministry in the last three years?
Creating an accountable ecosystem, establishing a definition of skill —for whom, how and of what outcome. Creating a convergence model at the central and state level and giving a framework to the skills sector.
Your ministry is well-funded, but implementation still seems to be a problem.
As this ministry did not have any footprint previously, it was a challenge at first to get the funds and then to use that money in a responsible way. The mechanism of delivering skills was more or less absent which, in the last one-and-half years, we have been able to (address). As the schemes roll out we shall be able to achieve both skill training and financial targets.
The NSDC model has not yielded much result. You had told us earlier that you were working on it. What’s the progress?
The NSDC model has still some challenges. It has a flexible model but does not earn money. It uses government money but doesn’t generate revenue, and has to be accountable to the government.
There are noises that NSDC should not implement any scheme but focus only on financing.
Actually it should have been that—to create and incentivize (the creation of a) skilling ecosystem for the industry or the market.
If you look at the record of NSDC, much of the previous lending which it did is becoming NPA. It doesn’t have a robust system. Thank the prime minister that he created this ministry to take control of the processes and the use of government money. Now, we have been able to control the process but lot of the damage has been done.
What percentage of NSDC’s loans have turned into NPAs?
I don’t know (off hand). But most of these were done before the new ministry came to picture (before November 2014). (NSDC money) turning NPA is a serious issue.
The industry was crying about lack of job ready workers but is not ready to pay premium to skill trained manpower…
It’s a demand and supply issue and the economy will take care of it. It’s not my job to regulate and decide the market parity of price. Except for the minimum wage, the other things cannot be taken care of.
There’s a view that the skills development sector is thriving on government money, but that private sector contribution is almost negligible. What’s your view?
We are watching the private sector. Though participation is there it is not of that level that we expected earlier.