Industrial training institutes of India: the efficiency report

INDUSTRIAL TRAINING INSTITUTES OF INDIA:

THE EFFICIENCY STUDY REPORT

Subregional Office for South Asia ILO, New Delhi

InFocus Programme on Skills, Knowledge, and Employability (IFP/SKILLS)

ILO, Geneva

2003

Industrial Training Institutes of India: The efficiency study report

Dr. Vladimir Gasskov, Senior Vocational Training Specialist, ILO, New Delhi – IFP/SKILLS, ILO, Geneva, Team Leader Mr. Ashwani Aggarwal, Deputy Director, Training, DGE&T, MOL Mr. Anil Grover, Deputy Director, Training, DGE&T, MOL Mr. Aswani Kumar, Senior Research Officer, DGE&T, MOL Mr. Q.L. Juneja, Director Projects (retired), DGE&T, MOL

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Contents

Page

Acknowledgements.................................................................................................................. ix

Executive summary .................................................................................................................. xi

List of acronyms ...................................................................................................................... xix

Section 1. Background of the study ........................................................................................ 1 1.1. Terms of reference for the study ............................................................................. 1

1.2. Employment growth and demand for skills training ................................................. 1 1.2.1. Employment growth in India............................................................................................... 1 1.2.2. Proposed changes in the National Vocational Training Programme................................ 4 1.2.3. Principal challenges............................................................................................................. 5

1.3. Brief on the vocational training policy and system................................................... 5 1.3.1. Education and training of the Indian labour force ............................................................. 5 1.3.2. Overview of the vocational training system....................................................................... 6 1.3.3. National vocational training policies.................................................................................. 7 1.3.4. Management structure of the vocational training system.................................................. 8 1.3.5. Principal training schemes................................................................................................... 9 1.3.6. Support system for vocational training............................................................................... 10 1.3.7. Growth of public and private training provision................................................................ 12

Section 2. Efficiency of industrial training institutes ................................................................ 14 2.1. The evaluation methodology .................................................................................. 14

2.1.1. Efficiency concept and indicators ....................................................................................... 14 2.1.2. Evaluation instruments ........................................................................................................ 15 2.1.3. Coverage of the study .......................................................................................................... 16

2.2. Principal findings .................................................................................................. 16 2.2.1. Training provision in the three surveyed states of India.................................................... 16

2.2.1.1. Orissa..................................................................................................................... 16 2.2.1.2. Andhra Pradesh..................................................................................................... 17 2.2.1.3. Maharashtra........................................................................................................... 20

2.2.2. Diminishing demand from organized industry for training graduates.............................. 24 2.2.3. The problem of training supply and demand imbalances.................................................. 25 2.2.4. Internal efficiency of training institutes.............................................................................. 27 2.2.5. External efficiency of training institutes ............................................................................ 30

2.2.5.1. Readings of efficiency indicators ........................................................................ 30 2.2.5.2. The employment status of graduates................................................................... 31 2.2.5.3. Utilization of knowledge and skills acquired in training institutes .............................................................................................. 32 2.2.5.4 Main activities of graduates who were not in employment or self-employment ......................................................................... 33 2.2.5.5 Limited role of training institutes in producing skills for the unorganized sector.......................................................................... 34

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2.2.5.6 Employer assessment of skills shortages........................................................... 35

2.3. Summary listings of findings .................................................................................. 36 2.3.1. Training policy challenges .................................................................................................. 36 2.3.2. Operational efficiency and accountability of ITIs ............................................................. 37 2.3.3. Training supply management .............................................................................................. 40 2.3.4. National vocational qualifications ...................................................................................... 42

Section 3. The agenda for reform ........................................................................................... 43 R1. Respond to policy challenges ................................................................................. 43

R2. Provide greater autonomy to ITIs and introduce the accountability framework .......... 43 R2.1. Expand scope of autonomy ................................................................................................. 43 R2.2. Reform management structures........................................................................................... 44 R2.3. Establish new relations between state governments and ITIs ........................................... 44

R3. Reform the ITI funding mechanism........................................................................ 45 R3.1. Introduce enrolment-based funding.................................................................................... 45 R3.2. Encourage income-generating opportunities...................................................................... 45 R3.3. Upgrade ITI capital assets ................................................................................................... 46

R4. Improve training supply management ..................................................................... 46 R4.1. Adjust training provision to employment growth forecasts.............................................. 46 R4.2. Address skills needs of low-literate youth.......................................................................... 46 R4.3. Support initiatives aimed at improving efficiency............................................................. 47

R5. Adopt a strategy for restructuring training provision ................................................ 47

R6. Reform the national vocational qualifications framework ......................................... 48 R6.1. Introduce new vocational qualifications and training programmes.................................. 48 R6.2. Address the problem of skills recognition.......................................................................... 48

R7. Implement the training system management project ................................................. 48

Annexes

1. Questionnaire for survey of industrial training institute ..................................................... 49

2. Questionnaire for survey of ITI graduates......................................................................... 51

3. Questionnaire for survey of enterprises ............................................................................ 53

4. Evaluation coverage in the three states of India ................................................................. 56

5. Internal efficiency of training institutes, Orissa ................................................................. 57

6. Internal efficiency of training institutes, Andhra Pradesh ................................................... 58

7. Internal efficiency of training institutes, Maharashtra ........................................................ 59

8. Proportion of ITI graduates in the workforce of industrial enterprises ................................. 60

9. Occupational structure of the organized economy and supply of graduates in Orissa...................................................................................................... 61

10. Occupational structure of the organized economy and supply of graduates in Andhra Pradesh ....................................................................................... 62

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11. Occupational structure of the organized economy and supply of graduates in Maharashtra ............................................................................................ 62

12. Employment status of graduates, trade-wise, Maharashtra ................................................. 62

13. Employer assessment of skills shortages of graduates of public ITIs................................... 62

14. Assessment of skills shortages by public training graduates ............................................... 62

15. List of ITI short courses in Maharashtra ........................................................................... 62

16. Generating self -employment through community services centre, ITI Ambernath, Maharashtra ........................................................................................... 62

17. Typical budget of the ITI ................................................................................................ 62

18. Record of meeting with graduates of the Industrial Training Centre/Private: Morwadi, Pune, Maharashtra (8 May 2003)............................................... 62

19. National vocational qualifications of India, 2002 .............................................................. 62

20. List of training institutes surveyed ................................................................................... 62

21. List of companies interviewed ......................................................................................... 62

22. Project of the government of India/proposal ..................................................................... 62

Tables

1. Annual vocational training capacity of ministries/departments in India............................... 7

2. Theoretical seating capacity available for training in engineering and non-engineering trades in India........................................................................................ 10

3. Public and private training provision in the three states of India (2002-03) ......................... 13

4. Indicators of internal efficiency of training institutes ........................................................ 14

5. Indicators of external efficiency of training institutes ........................................................ 15

6. Enrolments in regular NCVT courses in the Nizam and Alladin Technical Institute/private, Andhra Pradesh...................................................................... 19

7. Share of ITI training in the education and training markets in Maharashtra ......................... 21

8. Internal efficiency of public ITIs in the three states of India (sample averages, all trades) ............................................................................................ 28

9. Internal cost-efficiency of public and private training institutes.......................................... 29

10. External efficiency of public ITIs in the three states of India (all trades) ............................. 31

11. External efficiency of private ITCs in the three states of India (all trades) ........................... 31

12. Employment and education and training status of graduates, all trades (percentage of all graduates interviewed) ........................................................... 32

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13. Utilization of knowledge and skills acquired in training institutes (percentage of all graduates interviewed).......................................................................... 33

14. Major activities of graduates who were not in employment or self-employment ............................................................................................................. 33

15. Major forms of further education and training of ITI graduates (percentage of all graduates who responded)..................................................................... 34

16. Share of companies that experienced problems of finding employees with required skills ......................................................................................................... 35

Graphs

1. Literacy levels of Indian workforce.................................................................................. 6

2. Proportion of the vocationally trained labour force of India (aged 20-24)............................ 6

3. Growth of public and private training institutes over the last 50 years................................. 12

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Acknowledgements

This assignment was possible due to the support of senior government officials at the Ministry of Labour, Government of India, as well as at the state governments.

Special thanks are due to:

– Ms. Asha Murty, Director General, Employment and Training (DGE&T), MOL;

– Mr. Sundaray, Director, Technical Education and Industrial Training, Orissa;

– Mr. V.R. Reddy, Director, Employment and Training, Andhra Pradesh;

– Mr. J.D. Bhutange, Director, Vocational Education and Training, Maharashtra.

The joint team of the ILO, New Delhi/DGE&T is grateful to the staff of the above agencies for their genuine interest and considerable participation in implementing this assignment.

This study was co-financed by and implemented under the continuing support of the ILO Subregional Office for South Asia, New Delhi and the InFocus Programme on Skills, Knowledge and Employability (IFP/SKILLS), ILO.

The Team Leader appreciated the important participation of Messrs. Q.L. Juneja, Director Projects and Ashwani Aggarwal, Deputy Director, Training, DGE&T who critically reviewed the design of this study as well as the instruments applied for the collection of data. Mr. A. Aggarwal also wrote a brief on the training system of India for this report. Both of them fully participated in the field study in the State of Orissa where the concept and the instruments for this study were tested and finalized.

Messrs. Anil Grover, Deputy Director, Training, and Aswani Kumar, Senior Research Officer, DGE&T, have been instrumental in carrying out this study in Maharashtra and Andhra Pradesh where the study samples were much larger and the work schedule was very tight.

All members of the team provided valuable comments on the draft of this report.

At ILO-New Delhi, it was Ms. Anjana Chellani, Senior Programme Officer, who managed to coordinate this rather long and complicated effort in which the ILO and the DGE&T successfully worked together.

Thanks are also due to Sri S.P. Singh and his family who input the data collected during this survey as well as to the National Applied Manpower Research Institute of India for computing these data.

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Executive summary

Section 1. Background of the study

Terms of reference for the study

The Directorate General of Employment and Training (DGE&T) requested the ILO to assist in conducting a study on efficiency/impact evaluation of the Industrial Training Institutes (ITIs). Such a study has been implemented in 2002-03 by the ILO-DGE&T team in the States of Orissa, Andhra Pradesh and Maharashtra and covered 121 training institutes (78 public and 43 private).

The purpose of this study was also to suggest activities aimed at improving the efficiency of training institutes. It has been an opportunity to review training policy, system, demand for skills training, and a capability of ITIs to respond to the needs for skills training in the most efficient way.

Labour market situation

India’s labour force reached 375 million in 2002 and will continue to expand over the next two decades. Some projections suggest that the labour force increase will amount to 7.0-8.5 million a year. However, to a large extent, the GDP growth of 6.7 per cent (2000) has been achieved in India with the employment growth being around only 1 per cent. Many large enterprises have been shedding labour while the capacity of agriculture to absorb workers is minimal.

As a result of the above developments there are around 27 million persons without jobs. In addition, a significant number of people are underemployed. The unemployment rates among youth are higher reaching in certain states as much as 35 per cent against the national average of 13 per cent. There is an urgent need to generate around 10.0 million of new jobs each year.

The need to focus on the skills for non-organized economy

The largest share of new jobs in India is supposed to come from the unorganized sector that employs up to 92 per cent of the national workforce and produces 60 per cent of GDP. This sector has seven times greater labour intensity per unit as compared to the organized economy and is some five times less capital intensive, while the role of the organized sector in job creation is expected to be very modest. Since small and micro enterprises are supposed to play a central role in the national employment creation strategy, they should be assisted in development of skills.

The formal skills training system, because of its educational entry requirements and long duration of courses, is basically not designed to offer skills to the low-educated people who cannot afford such training. On the other hand, there are no other significant providers of skills training that would be able to serve the numerous enterprises of the unorganized economy. This report has concluded that the development of skills for the unorganized sector should be incorporated into the national training policy and system.

Skills development for the sectors of future employment growth

The sectors with high potential employment growth such as agro-business, forestry, tourism, community and personal services, etc. have been identified by the National Planning Commission of India with the important share of these activities to be in the

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unorganized sector. So far, however, the unorganized sector has been unable to offer attractive employment to formal education and skills graduates. The reasons are that such jobs remain of low quality, conditions are precarious and income is too low.

The DGE&T training system

The vocational training system of India offers training through public Industrial Training Institutes (ITIs) as well as Industrial Training Centres (ITCs) that are private establishments. Enrolment-wise, the ITIs are much larger, while most private ITCs offer only a few trades. Therefore, in some states, the number of public ITIs is in dozens while the number of private ITCs is in hundreds. Until recently, the numbers of private ITCs had been growing very rapidly but reached saturation very soon and their numbers are now declining. The number of public ITIs has exhibited slow growth while student enrolments and graduations are diminishing.

The Government of India has made a considerable investment in skills development of young people through setting up the ITIs. Historically, they have been established with the major aim being to speed-up the process of industrialization in this country. This, however, determined the rather limited range of national vocational qualifications, the majority of which are basic industrial trades, while the non-engineering trades necessary for development of, for instance, the services sector, continue to be under-represented.

The training institutes, both public and private, operate under the general guidance of DGE&T, Ministry of Labour. At the national level, the DGE&T is the nodal department for formulating policies, laying down standards and some other technical requirements for vocational training. The State Government Departments are responsible for delivery of vocational training through ITIs that operationally report to and are funded by them. The principal training schemes are the Craftsmen Training Scheme (CTS) and the Apprenticeship Training Scheme (ATS). They deliver 67 nationally recognized trades, 43 of which are engineering and 24 non-engineering. In 2003, a number of new trades were introduced.

State governments operate some 4,650 ITIs with a total capacity of 678,000 training seats. Out of this, nearly 373,000 seats are established in some 1,800 government ITIs, and the residual 305,000 are in some 2,850 private ITCs. The number of vocational training institutes in India has shown a rapid increase over years with the current growth, however, being mostly driven by private training providers.

The formal training system of India, both public and private, offers training programmes only to the educated youth who reached Grade 8 and above. Given the rather low overall level of general education and high rates of school drop-outs in the country, it is only a relatively small share of Indian youth who could, in principle, access formal vocational training programmes.

The DGE&T’s skills development system operates in competition with other providers of formal and non-formal skills programmes, such as high vocational schools (the so-called 10 plus 2 stream), colleges, polytechnics, etc. The share of ITI-based training seems to capture around 10-12 per cent of the total number of school graduates at Grade 10.

Training reforms proposed by government agencies

The National Planning Commission, DGE&T and other government agencies have proposed a number of changes to be brought about in the national training system. The major policy change should address the problem of distribution of public training services between the organized and unorganized economies. In order to reduce the unemployment

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rate of the educated and skilled workers, it is proposed to retrain and deploy them into the unorganized sector. It is also believed that a further expansion of the skills training institutes would be required to satisfy the demand for skills of the growing unorganized economy.

It was suggested to: (a) encourage expansion of private training, (b) improve the state governments’ allocation for skills training, (c) improve effectiveness, efficiency and relevance of training, (d) strengthen interaction between industry and ITIs, (e) form state-level bodies to provide guidance to ITIs’ operations, (f) review the national classification of occupations, etc.

Some other recommendations have been made regarding the management of ITIs, such as: (a) review the status of public training institutes that currently does not support their operational flexibility and responsiveness, (b) re-establish some 100 ITIs as Centres of Excellence that will be registered as autonomous bodies and have linkages to the industry, etc.

As far as skills training for the informal economy is concerned, it was proposed to: (a) develop a policy framework enabling training for the unorganized economy, (b) conduct surveys of training needs of the unorganized economy, (c) open training-cum-production centres to address skills training needs, etc.

All the above proposals are very timely and this report has attempted to develop, where possible, more details on how they could be implemented.

Most of the above policy notions are well pronounced in the draft National Policy on Vocational Training of India. 1 However, the current economic and employment situation challenges the training policy statement and some further policy changes may be required.

Section 2. Efficiency of industrial training institutes

Situation with training enrolments and funding in the states

The study revealed that enrolments in public ITIs in Orissa and Andhra Pradesh have recently experienced an apparent decline due to a number of reasons such as the:

– lack of student demand for training in the basic industrial trades;

– rapidly diminishing demand from industry for training graduates as well as for formal apprentices;

– shortage of the government funding for the pubic training provision;

– over provision of skills training due to the uncontrolled growth of private ITCs;

– problem of supply and demand imbalances at the state level.

The ITI training programmes are decided centrally by State Directorates of Technical Education and Industrial Training and obviously do not match the local demand for skills. No labour market assessment surveys have been applied regularly to check the potential demand for skills. Graduates’ labour market success has also not been examined. As a result, ITI courses continue to have only far-fetched links with the local labour markets.

1 National policy on vocational training, draft, DGE&T, MOL, GOI, 2002.

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The data collected in ten districts of the three states indicate that the graduate supply-demand ratios 2 are very high reaching for some trades like welder, fitter, electrician, electronic mechanic, etc., more than 0.5. This means that annual graduations in these trades equal half of the jobs available in industry in the same trades. It is inconceivable that so many graduates can be employed annually trade-wise while industrial employment stagnates. Reasonable supply-demand ratios are 0.1 and below.

Distortions of supply-demand ratios have increased noticeably because of uncontrolled enrolments in private training centres. Private training is dominated by several trades, such as fitter, electrician, welder, etc. As a result, the supply -demand ratios in certain trades are, by far, greater than for other trades. Such practices resulted in increased risks to students and support unemployment.

Concept of efficiency of training institutes

This study applies the concepts of internal and external efficiency of training institutes. A measure of internal efficiency deals with performance and outputs of training institutions with regard to: (a) the numbers of students enrolled, retained and successfully graduated, and (b) utilization of training seats, capital assets and human resources in producing these outputs.

The external efficiency refers to the outcomes that have been achieved by training institutes. The outcomes reflect primarily the impact of training on the employability of graduates as well as on their capability to utilize the knowledge and skills acquired during training. The external efficiency of ITIs has been assessed through labour market success of graduates, their capability to utilize skills acquired, as well as satisfaction of their employers with skills.

The evaluation was conducted through four different surveys involving training institutes, companies, ITI graduates as well as senior training administrators. The survey covered the training programmes that were delivered by a sample of ITIs and ITCs in the years 1999 and 2000. The survey also covered the graduates of selected institutes who enrolled in 1999 and 2000.

Sample of the study

A sample for this study has covered 121 training institutes (78 public ITIs and 43 private ITCs). The evaluation of internal efficiency of training institutes covered 6,660 students of private ITCs and 17,900 students of public ITIs. The tracer study on the employability of graduates involved 8,510 students of public ITIs and 2,645 students of private ITCs. More than 70 industrial enterprises were surveyed.

Internal efficiency of ITIs and ITCs

As far as internal efficiency is concerned, there are signals that it has been declining. In some states, there has been a rapid decline of efficiency while in others it is only emerging as a trend. Signals of diminishing internal efficiency involve reduced student enrolments, large proportions of drop-outs and low graduation rates. A considerable capacity of training institutes such as planned training seats, space, training equipment and available staff were underutilized due to the above.

2 Supply-demand ratios are calculated by dividing the numbers of graduates in each trade by the number of jobs identified in that trade in the organized economy enterprises. Numbers of graduates are calculated on the basis of course enrolments and adjusted to the internal efficiency indicators calculated for each trade.

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The principal indicator of internal efficiency – a share of sanctioned (authorized) training places that produces graduates has been, in the public ITIs, around 32 per cent (Andhra Pradesh), 63 per cent in Maharashtra and almost 74 per cent in Orissa. There are certain trades that are not popular and continue to generate very low efficiency.

The private Industrial Training Centres (ITCs) have been able to achieve a slightly higher internal efficiency rate as they exercise their freedom of selection of courses and of hiring and firing instructors. The principal internal efficiency indicator reflecting the proportion of training places that produce graduates has been around 46 per cent in Andhra Pradesh, 66 per cent in Maharashtra and around 91 per cent in Orissa. However, some caution needs to be expressed regarding the quality of the ITCs’ teaching staff as well as training premises and equipment. In addition, the above data have been calculated for a limited sample of trades.

External efficiency: Employability of graduates

The ITIs and ITCs have a significant problem of external efficiency as employability of their graduates remains rather low. In Maharashtra, around 36 per cent of public training graduates and around 42 per cent of graduates of private training institutes were in various forms of wage employment and self-employment, including assisting parents in doing family businesses. In Andhra Pradesh, involvement of public graduates in various forms of work-related activities was around 41 per cent, while for private graduates this figure was considerably lower, being around 23 per cent.

The share of unemployed among all graduates in Maharashtra was between 23 and 27 per cent, while in Andhra Pradesh around one-third of public graduates and more than 70 per cent of private graduates reported unemployment.

External efficiency: Utilization of skills acquired at training

Around 65-68 per cent of public training graduates reported that they had worked in the trades in which they had been trained, or in the closely related trades. This does not, of course, mean that they were in employment or self-employment in such trades at the time of the study. As far as skills utilization is concerned, in Maharashtra, the private ITC graduates were as successful as the public graduates.

Employer training practices

The study has found that there is no shared understanding in the industry of what is a skilled or semi-skilled worker. The only basis for deciding this is availability of the National Trade Certificates that few employees possess. More difficulties are associated with the fact that national vocational qualifications and corresponding trade certificates have no agreed levels of proficiency. As there are no levels of recognized proficiency of workers, there could be little interest to improve skills and to learn more. The workers leaving a company after many years of service would have the same qualification status as they had on entry.

Emerging response to the problem of external efficiency

Several approaches have emerged to resolve the problem of internal and external efficiency of training institutes. One of the approaches addresses low employability of graduates through establishing community development centres with the use of ITIs’ spare premises and machines. The community services centres absorb former graduates who failed to find wage employment and are now willing to enter self-employment but

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currently lack self-confidence, resources and practical skills. Another approach is to encourage shorter courses for the unorganized sector and any other clientele who do not wish to pursue National Certificates. Fee-funded courses are also encouraged, enabling training institutes to improve their financial position. As a result of the above activities, the space and equipment of the ITIs/ITCs are utilized more productively resulting in improved internal efficiency.

Section 3. The agenda for reform

The agenda for reform suggests directions for improvement of efficiency of industria l training institutes (see summary of recommendations below).

Summary listing of recommendations

Explanatory note

The recommendations listed below have been copied, in the abbreviated form, from the text of this report (for full text of recommendations see Section 3. The agenda for reform).

The ILO-DGE&T team recommends:

R.1. To review the national training policy in order to recognize the need for:

(a) reorienting the ITI skills training programmes towards modern industrial and particularly non-industrial programmes;

(b) addressing skills development needs of the non-organized sector;

(c) better integration of ITI-based training with formal apprenticeships in order to reduce the overall learning periods and improve private returns to investment in skills training.

R 2. To provide greater autonomy to the ITIs and introduce the accountability framework. The autonomy of training institutions should have a well defined scope and be accompanied by reform of their legal status, management structures, funding, and staffing. Introduction of autonomy and demand for greater efficiency should be accompanied by a new accountability framework.

R 3. To reform the ITIs’ funding mechanism through the introduction of enrolment–based funding so as to link public finding to performance and outputs of training institutes

R 4. To improve training supply management by the state governments and by training institutions themselves through strengthening their capabilities to:

(a) analyse potential demand for skills in the local labour markets. This would help to avoid the demand-supply imbalances and improve efficiency of training institutes;

(b) supervise the quantity and quality of the fast growing private training provision; this would help to reduce considerable risks for young people undertaking training;

(c) promote initiatives for improving the efficiency of ITIs that have been developed and tested in some states.

R 5. Adopt a strategy for restructuring the ITIs’ training provision through:

(a) selective reduction of enrolments on long-term courses in basic industrial trades;

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(b) introduction of training programmes in new industrial trades;

(c) introduction of training courses for educated school leavers in non-industrial trades

(d) introduction of short courses in basic and other industrial trades for school drop-outs, unorganized sector workers and school graduates who do not want to pursue the National Trade Certificate.

R 6. Reform the national vocational qualifications framework and address the problem of skills recognition though the introduction of:

(a) competence-based vocational qualifications;

(b) levels/grades of vocational proficiency;

(c) practices allowing to test and certify skills of workers that have been acquired through practical experience; and

(d) modular-based vocational programmes.

R 7. Implement the proposed project on Management Reform of Industrial Training Institutes (see Annex 22).

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List of acronyms

DGE&T, GOI – Directorate General of Employment and Training, Government of India

ILO – International Labour Organization

ITI – Industrial Training Institute

ITC – Industrial Training Centre

NCVT – National Council for Vocational Training

SCVT – State Council for Vocational Training

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Section 1. Background of the study

1.1. Terms of reference for the study

The assistance of the ILO in carrying out the study of efficiency/impact of Industrial Training Institutes (ITIs) in the three selected states of India was requested by the Directorate General, Employment and Training (DGE&T), MOL, Government of India.

Purpose:

To suggest activities aimed at improving the ITIs’ impact/efficiency.

Team:

A study to be implemented by the joint efforts of the ILO/SAAT, ILO-New Delhi and DGE&T (see front page of this report for the constitution of the team).

Stages:

(a) A study of the ITIs’ and ITCs’ operational efficiency to be carried out. A sample of training institutions will be selected and evaluated.

(b) The findings and conclusions of the study will be presented in a report.

(c) A project proposal for donor funding to be drafted.

1.2. Employment growth and demand for skills training

1.2.1. Employment growth in India

Economic growth versus employment growth

India’s labour force reached 375 million in 2002 and will continue to expand over the next two decades. Some projections suggest that the labour force increase will amount to 7-8.5 million a year. To a large extent, the GDP growth of 6.7 per cent (2000) has been achieved without employment growth, being only around one per cent. Many large enterprises have been shedding labour while the capacity of agriculture to absorb workers is minimal. The growth of the non-organized economy is seen to be much higher than that of any other sector. However the workers of this segment of the economy seem to be the least educated and trained.

As a result of the above developments, the unemployment rate in India has increased significantly from 6 per cent (1994) to 7.3 per cent in 2000. There are around 27 million people without jobs. Three-quarters of the unemployed is in rural areas with three-fifths of them having been educated. A significant number of people are underemployed. The unemployment rates among youth are significantly higher reaching in certain states as much as 35 per cent against the national average of 13 per cent. In addition, the poorer classes have an unemployment rate almost twice that of the higher consumption classes. There is an urgent need to generate around 10 million new jobs each year. The education and training services are supposed to improve access of the poorer classes of the society to employable skills.

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Focus on skills for the unorganized sector and self-employment

It is now understood that the largest share of new jobs in India would be created in the unorganized economy that employs up to 92 per cent of the national workforce and produces 60 per cent of GDP. This sector has seven times greater labour intensity per unit as compared to the organized economy and is some five times less capital-intensive, while the role of the public and private organized sector in the creation of jobs is expected to be very modest. Since small and micro enterprises are supposed to play a central role in the national employment creation strategy, they should be assisted in increasing productivity, competitiveness and job quality. All this points to the need for improving skills preparation for the unorganized economy.

ILO studies 1 have revealed that the majority of workers in the unorganized economy of India have never been to vocational training institutions and many of them have never been to school. The formal training system, because of its entry requirements and geographical mapping, is not designed to offer skills to the low-educated people and particularly those who operate in the rural non-farm sector. On the other hand, there are no other providers of the short term, but structured training that would be able to serve the numerous employees of micro enterprises. Workers in this sector continue to learn trades on the job from, also, low-literate and low-skilled craft people. This situation has its impact on the unorganized economy’s capability to produce goods and services. This discussion has to conclude that the development of skills for the unorganized economy should be incorporated into the national training policy and operations.

Sectors with employment growth potential

The government reports quoted below 2 suggest the following sectors have high potential employment growth: commercial agriculture, agro-industry and agro-business, forestry and pulp and paper, retail and wholesale trade, tourism, housing and construction, garment industry, the IT and IT-enabled services, education, health, financial services, transport and communications, and community services. An important portion of these activities is and will be in the unorganized economy. The enormous opportunities for employment growth associated with these sectors are thought to help considerably in reducing or eliminating unemployment in India by 2020.

The current situation, however, is that in India’s vast informal economy, skills are acquired over a long period of traditional apprenticeship. The core of the informal economy employs mostly non-skilled and semi-skilled workers in basic trades such as fitters, welders, electricians, tailors, etc. Their skills are rather narrow as trainees are mainly low-literate and have no structured preparation. As a result, many basic goods and services produced are of low quality with the demand for them remaining as long as there is a significant number of people living below the poverty line who cannot consume better services. The ILO study has identified that the demand for some low-cost products and services of the informal economy may be getting saturated as their supply seems to be

1 V. Gasskov and M. Burns: “Training for employment promotion in Muktsar District, Punjab”, ILO, New Delhi, 2001.

2 Approach paper to the tenth five year plan, Planning Commission, GOI, September 2001; Targeting ten million employment opportunities per year, Planning Commission, GOI, New Delhi, 2002; Recommendations of the 2nd National Commission on Labour, MOL, GOI, 2002.

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exceeding the demand for them. 3 This would result in the diminishing income of the unorganized economy operators and produces disincentives for joining this sector.

This study also suggests that such businesses have been unattractive to the skilled trade graduates as they offer low quality of jobs as well as low remuneration and prestige. On the other hand, it is likely that a number of businesses of the unorganized economy are involved in production of high quality consumer goods or semi-finished goods for larger enterprises and they therefore grow rapidly and require highly skilled persons. It is exactly such businesses that have a capability to absorb the skilled graduates produced by ITIs.

It is estimated that the largest number of new jobs will be created in the services sector of India adding some 120 million jobs by the year 2020. The most promising sectors would involve financing, insurance, education, health, construction and real estate, advertising, printing and packaging, etc. These sectors have witnessed much higher than average rates of growth. As international studies suggest, some 80-90 per cent of the developed countries’ economic growth has been determined by knowledge creation and dissemination. The future economy of India is expected to become the knowledge-intensive services economy. Development of vocational knowledge and skills should become a significant part of the forthcoming knowledge revolution in India.

The World Bank estimates that India will become the fourth largest economy in the world by 2020 as the global markets for textiles, clothing, agricultural products, software and IT-enabling services and other products that are well developed in India, will expand dramatically. However, India’s ability to benefit from this trend will depend on its improved capacity to keep pace with rising international standards of price, quality, safety and productivity. India will also have to become far more aggressive in acquiring and applying advanced technologies in agriculture, biotechnology, IT, energy, education, etc. Currently, a significant proportion of workers in India earn below subsistence wages as they apply low productive technologies and working methods. Therefore, the objective of employment generation is not only to ensure availability of jobs but also to ensure that people receive a decent income. This would require masses of people to be educated and trained in applying new technologies.

The knowledge and skills of the national workforce will be a major determinant of the future economic growth and the type and number of jobs that can be created. However, only 5 per cent of the country’s total workforce in the 20-24 age group is estimated to have undertaken skills training. This figure is far below many other developing countries. To remedy this, it is suggested that annual vocational participation reach the level of 10 million people, an increase of more than five times the current participation.

Demographic implications for student demand for training places

Currently, around 10-12 per cent of graduates from the 8, 10 and 12 classes of general education school annually seem to enter public and private vocational training institutes. Given the projected population growth rate of around 2 per cent a year, it should be expected that many more additional training places would be required within five years in order to satisfy the student demand (if the current ratio of vocational participation remains). The current trends also suggest that because of the low funding levels made available by state governments for public training institutes, most of the growth of student places would likely be achieved in private training institutes. However, the public ITIs can considerably increase their enrolments and student graduation rates. This would strengthen

3 V. Gasskov and M. Burns, op. cit.

4 Gasskov.doc

the role of the public training system in producing graduates in the occupations requiring high capital investments that are not usually available in the proprietary training institutions.

1.2.2. Proposed changes in the National Vocational Training Programme

The National Planning Commission, DGE&T and other government agencies have proposed a number of changes to be undergone by the national vocational training system. The major proposed policy change would address the problem of distribution of public training services between the organized and unorganized economies. Because of employment saturation in the organized sector, the unorganized economy, and mostly its non-farm rural and services sectors are most likely to become the major consumers of skilled (and unskilled) labour.

It is believed that a further expansion of ITIs would be required to satisfy the demand for skills of the growing unorganized economy. Because of the low quality of jobs in this economy, they may not be attractive to the educated and skilled graduates of formal training institutes. It is therefore suggested to launch the productivity improvement programmes along with the introduction of some legislation enabling the inducement of decent work to the unorganized economy. Some of the proposed practical measures that are related to the ITIs are summarized below. 4

Expansion of training facilities:

n Encourage expansion of the private training provision.

n Improve the state governments’ allocation for skills training.

n Adopt distance learning and other alternative training delivery mechanisms.

n Introduce skills training for poverty alleviation programmes.

n Strengthen the Skills Training Programme for Women and disadvantaged groups.

Improvement of effectiveness, efficiency and relevance of training:

n Strengthen interaction between industry and ITIs.

n Improve staff development and motivation.

n Introduce modular training and multi-skilling.

n Introduce competency-based certification for workers without formal training.

Improvement of management of the national training system:

n Form state-level bodies to provide guidance to ITI operations.

n Review the national classification of occupations.

4 Targeting 10 million employment opportunities per year, op. cit.

Gasskov.doc 5

Reforming vocational training in the states:

n Review the formal status of public training institutes that currently do not support their operational flexibility and responsiveness.

n Re-establish some 100 ITIs as centres of excellence that will be registered as autonomous bodies and have linkages to industry.

Training for the informal economy:

n Develop a policy framework enabling training for the unorganized economy.

n Conduct surveys of training needs in the informal economy.

n Open training-cum-production centres to address skills training needs.

1.2.3. Principal challenges

The above suggestions reflect several major challenges that are being faced by the national vocational training system of India. They come to two major conclusions:

First, the current training policy and training delivery system no longer reflect realities and have a reduced capability to promote employment. The vocational training system of the nation, where 92 per cent of the workforce is in the unorganized economy, continues to focus on the organized sector that is unable to employ training graduates with its workforce being expected to diminish further. Policy and operational changes are to be introduced that would allow the involvement of the training system in delivery skills training for the unorganized economy.

Second, it is recognized that the legal, financing and management arrangements regarding public ITIs constrain their operational flexibility and responsiveness and need to be reformed accordingly. The basic need here is to remove the administrative and reduce financial constraints of the ITIs in order to reinforce their staff motivation and introduce sufficient freedom to operate flexibly and efficiently. This issue is very complex and would require reform in the areas of political significance, such as the delegation of operational and financial autonomy to the public ITIs and a corresponding revision of the state government’s roles and responsibilities. Development of ITIs as autonomous institutions would involve a painful reform of the employment status and social security arrangements for its staff, introduction of greater accountability, change of funding system, etc.

1.3. Brief on the vocational training policy and system

1.3.1. Education and training of the Indian labour force

Educational levels of the labour force in India are rather low. In 1999-2000, about 44 per cent of all workers were illiterate, while 22.7 per cent completed primary school. About 33.2 per cent of the labour force graduated from the middle-school. A share of the labour force that completed middle school is of course higher in the urban areas, being around 57.4 per cent; while for the rural workforce it was only 25.4 per cent (see graph 1).

6 Gasskov.doc

Graph 1. Literacy levels of Indian workforce

Illiterate 44%

Primaryschool 23%

Middle school& above

33%

As far as vocational skills are concerned, the labour force in India compares unfavourably to other countries. Graph 2 below shows that only 5 per cent of the young Indian labour force (aged 20-24), received formal vocational training, whereas this indicator in industrialized countries varies between 60 and 80 per cent. In the Republic of Korea, it is as high at 96 per cent, while in Mexico, it is 24 per cent, etc. Although the level of educational attainment of the Indian workforce is low, the educated people constitute 69 per cent of the total unemployed.

Graph 2. Proportion of the vocationally trained labour force of India (aged 20-24)

1.3.2. Overview of the vocational training system

The technical education and vocational training system in India produces a labour force through a three-tier system, as follows:

– Graduate and post-graduate level specialists (e.g. ITIs, engineering colleges) trained as engineers and technologists.

– Diploma-level graduates who are trained in polytechnics as technicians and supervisors.

– Certificate-level craft people trained in ITIs as well as through formal apprenticeships as semi-skilled and skilled workers.

There are some 17 ministries/departments which provide or finance vocational education and training programmes. Their total annual training capacity is estimated to be about 28 lakh (2,800,000) students. There is a lot of diversity between programmes in terms of duration, target group, entry qualifications, testing and certification, curriculum, etc. Some of the courses are conducted in formal institutions with uniform curriculum and prescribed examination standards while others are need-based courses.

INDIA

KOREAJAPAN GERMANY CANADA

MEXICO

020406080

100120

Pro

port

ion

of

Voc

atio

nally

Tra

ined

Gasskov.doc 7

Training of school leavers at the Grade 8/plus

There are six ministries/departments offering programmes that can fall into this category (see table 1). Their total annual training capacity is about 12.71 lakh (1,271,000). DGE&T supervises the biggest training system accounting for more than half of this capacity. In terms of persons trained per annum, DGE&T’s share is more than 60 per cent, while the utilization of capacity of the “Vocationalization of Secondary Education” programme under Ministry of HRD is about 40 per cent.

Table 1. Annual vocational training capacity of ministries/departments in India

Ministry/Department Estimated training capacity/persons trained (annually)

M/o Health and Family Welfare 0.20 lakh

M/o Human Resource Development Vocationalization of Secondary Education

4.9 lakh (utilization is about 40%)

Apprenticeship training 0.19 lakh

National Open School 0.067 lakh

D/o Information Technology DOEACC ‘O’ level

0.75 lakh

M/o Labour (DGET) Apprenticeship Training Scheme

About 5.0 lakhs

Craftsmen Training Scheme About 1.5 lakhs

Other long-term training programmes 0.07 lakh

D/o Small Scale Industries 0.02 lakh

D/o Tourism (Food Crafts institutes) 0.011 lakh

TOTAL 12.708 lakh

Programmes for school leavers are generally long (between 12 and 36 months’ duration) with the prescribed minimum entry educational qualification, standard curriculum and examination at the end of the course.

1.3.3. National vocational training policies

The national training policies usually deal with the notions of the national training objectives, principal target groups, training schemes, division of responsibilities between the Government and the social partners, principles of distribution of the publicly funded training, equity issues regarding access to training, roles of public and proprietary training providers, training quality assurance, etc. The training policy statement is usually a result of consultations between the suppliers of services (training system), consumers of training and other groups that have a vested interest in skills development. Producing/reviewing a national training policy statement is the way to agree on these important issues by all parties involved. One can say that the process of drafting the training policy is equally as important as the final document.

8 Gasskov.doc

Most of the above policy notions are well pronounced in the draft National Policy on Vocational Training of India. 5 However, the training system’s efficiency, responsiveness and flexibility seem to have reached levels suggesting the need for considerable reform.

Principal policy challenges

A number of principal challenges have been identified by this report that have been caused by the new economic and labour market environment and need to be reflected. They would continue to impact on the operations of ITIs if they were to improve their efficiency. The most important issues are summarized below:

(a) What policies and objectives should be set before the ITIs in the new economic and employment scenario that features slow growth of jobs in the organized sector and a diminishing demand for basic industrial trades?

(b) What type of ITI performance should be regarded as efficient in such an economic and employment scenario in India?

(c) Should public ITIs continue to provide training in mostly industrial trades while the major future demand for skills may be in the non-industrial sectors? If so, should ITIs continue to be the industrial training institutes?

(d) What role should be left to the ITIs regarding skills training for the organized economy that has only limited employment opportunities, particularly as far as the basic industrial trades are concerned?

(e) Whether or not the unorganized sector with its largely low-quality and low-wage jobs be able to absorb the educated and skilled ITI graduates?

Some comments and suggestions on the need to refine the national training policy and system as well as on the legal, administrative and financial framework in which the ITIs operate, are offered in section 3: The agenda for reform.

1.3.4. Management structure of the vocational training system

National Council for Vocational Training

Two tripartite bodies, such as the Central Apprenticeship Council (CAC), a statutory body and the National Council of Vocational Training (NCVT), a non-statutory body, operate as advisory tripartite institutions in India. The NCVT was set up by the Government of India in 1956. It is chaired by the Minister of Labour, with members representing central and state government departments, employers’ and workers’ organizations, professional bodies, the All India Council for Technical Education, representatives from the scheduled castes and scheduled tribes, the All India Women’s Organization, etc.

The most important NCVT functions involve:

– establishing and awarding National Trade Certificates in engineering, building, textile and leather trades;

5 National policy on vocational training, draft, DGE&T, MOL, GOI, 2002.

Gasskov.doc 9

– prescribing standards for syllabi, equipment, space, duration of courses and methods of training;

– arranging trade tests and laying down standards of proficiency required for the National Trade Certificate;

– recognition of training institutions for the purposes of issuing National Trade Certificates and laying down conditions for such recognition.

State Councils for Vocational Training

The State Councils for Vocational Training (SCVTs), as well as the Trade Committees were established to assist the NCVT. They advise the state government on training policy matters and are supposed to co-ordinate vocational training in each state.

DGE&T

The ITIs, both public and private, operate under the general guidance of the Directorate General, Employment and Training (DGE&T), Ministry of Labour. According to the Constitution of India, the central Government and the state governments share responsibility for vocational training. The DGE&T is the nodal department for formulating policies, laying down standards and other technical requirements for vocational training. It also governs a number of specialized training- related institutions. The state government departments are responsible for delivery of vocational training through the ITIs that operationally report to and are funded by them. DGE&T also has a number of technical functions in the development of curricula, instructor train ing, skills testing, etc.

1.3.5. Principal training schemes

Among national training schemes implemented in India under the DGE&T, the Craftsmen Training Scheme (CTS) and the Apprenticeship Training Scheme (ATS) are the most important. Both provide pre-employment training for young people. Graduation from the CTS is also a preferred way to enter apprenticeship. The CTS provides long-term institutional training, while the ATS is a combination of institutional and on-the-job training. The CTS aims at producing semi-skilled workers, while the graduate apprentices are considered as skilled. More details on both schemes are given below.

Craftsmen Training Scheme (CTS)

Craftsman training was introduced in 1950 for imparting full-time training through ITIs in various trades. Training is offered to persons within the age group 14-25 in 43 engineering and 24 non-engineering trades. The period of training varies from one to three yeaRs.In October 2002, the CTS was being delivered by state governments through some 4,647 public and private training institutes, with a total capacity of around 678,000 training seats. A new trend emerged in 2003 when some 36 new courses of 6 months’ duration mainly covering unorganized sector were added to the CTS.

Educational qualifications for admission to ITIs under the CTS vary from 8 to 12 Grade, depending upon the trade. Table 2 indicates number of trades and their theoretical seating capacity. At the end of the programmes, trainees have to appear for the All India Trade Test conducted on behalf of the NCVT. Successful graduates are awarded the National Trade Certificate and are classified as semi-skilled craftsmen.

10 Gasskov.doc

Table 2. Theoretical seating capacity available for training in engineering and non-engineering trades in India

Minimum educational qualification Number of trades Number of seats (thousands)

8th Standard 15 (9 engineering, 6 non-engineering) 110

10th Standard 50 (35 engineering, 15 non-engineering) 546

12th Standard 2 (engineering) 21

The Apprenticeship Training Scheme

The ATS is regulated under the Apprentices Act, 1961. It is a statutory obligation of employers of specified industries to engage apprentices as per ratios prescribed for a designated trade. So far, 254 groups of industries have been appointed for training apprentices in 153 designated trades. Some 13 new trades have been notified for introduction in 2002. Some 19,500 industrial establishments have been assessed under the Act to train apprentices. In 2002, the apprentice total seating capacity was nearly 216,000 with actual utilization being around 155,000. The duration of training ranges from six months to four years.

Arrangements made under the Act require enterprises to report on their occupational structures to the State Governments and Apprenticeship Boards. This represents a unique opportunity to learn the occupational profiles of the organized economy and enables the programming and planning of skills training state and district-wide. This study has made use of this rare opportunity and the data collected on the occupational structures of industries in the three states of India are discussed in section 2.2 (see also Annexes 9, 10, 11).

1.3.6. Support system for vocational training

Trades and vocational qualifications applied

In India, in 2002, there were 67 nationally recognized trades: 43 engineering and 24 non-engineering. The pass-outs are awarded the National Craft Certificate. There are no levels associated with these certificates eliminating an opportunity for workers to achieve higher levels of certified proficiency.

National qualifications have been developed and are supervised by the NCVT (for the full list of trades applied in India, see Annex 19). The range of qualifications is obviously rather narrow and mainly involves basic industrial trades. The non-engineering trades that are required in the fast growing sectors such as agro-processing, personal and community services, insurance and financial services, etc. are not represented at all. Another implication of this situation is that given the usual high participation of women in the services sectors, there are too few national vocational qualifications that would satisfy women’s interest in skills development.

In principle, states have the freedom to develop their own vocational qualifications and programmes, the graduates of which would be eligible for the awards issued by the State Councils for Vocational Training (SCVTs). However, in practice only few states used this opportunity, the reason being that students aim at the national trade certificates assuming that they give a better chance to find wage employment.

Gasskov.doc 11

It seems that there is a pressing need for a comprehensive review of the national qualification framework as well as of the process of developing and supervising national vocational qualifications in India.

Curriculum development

The vocational training curriculum is national with 70 per cent of time commonly allocated to practical instruction; the residual is for theory. The Central Staff Training and Research Institute (CSTARI) at Kolkatta has been assigned responsibility for preparation of draft curricula and their revision from time to time. The DGE&T’s Curriculum Development Section coordinates the work related to development and revision of curricula. It scrutinizes draft curricula and obtains approval of the NCVT. The periodicity of revisions depends on the technological changes taking place in industry in each particular trade. Generally, the introduction or revision of curriculum is based on recommendations made by NCVT. This work should be done in consultation with relevant trade committees whose members are drawn from industry, technical institutions and DGE&T institutes. Some 36 syllabi under the Craftsmen Training Scheme were revised during the last six years.

Skills assessment and certification

The DGE&T staff prepare, with the help of experts from industry, question papers, bill of materials, etc. and forward them to the state departments in charge of training. It also sets up the examination schedules. The state departments make arrangements for conducting trade tests according to the NCVT norms. They invite eligible trainees to appear for the trade test; select trade testing centres, appoint a Local Board of Examination for the trade testing centres, appoint supervisors, and eventually issue National Trade Certificates. A National Trade Certificate is a recognized qualification for recruitment by government establishments.

Training quality assurance

The institute affiliation procedures is the major instrument to assure quality of training particularly with regard to private ITCs. The State Director can convey provisional permission to the ITC only for starting the Institute and for providing necessary infrastructure facilities for the proposed trades according to the norms of the NCVT. The State Director should establish a Standing Committee to inspect the Institute. Such a Committee would involve the State Director in charge of the Craftsmen Training Scheme or his senior officer. One member will be nominated by the Secretary of the NCVT, two members will be nominated by the SCVT, etc.

The Standing Committee may recommend affiliation for certain trades. The State Director would forward the inspection report to the Secretary, NCVT, for granting affiliation. The inspection report would also be scrutinized by the DGE&T. Only those trades/units, which meet the prescribed norms, would be recommended for affiliation to the NCVT and should be confirmed by the NCVT’s subcommittee dealing with affiliation.

Instructor and management training

The ITI instructors are trained in the Advanced Training Institutes on programmes of one year’s duration with the total seating capacity being 900. Training modules involve trade technology (six months), engineering technology (three months), and training methodology (three months). Although the CSTARI, Calcutta conducts training management programmes for principals of ITIs, this training has limited scope and principals are mostly appointed from the teaching staff.

12 Gasskov.doc

1.3.7. Growth of public and private training provision

Under the Craftsmen Training Scheme (CTS), training provision is implemented by the ITIs that are established, administered and funded by the state governments. The ITI staff are civil servants and their assets are owned by respective state governments. As central Government does not intervene, this tends to result in disparities between states in their capabilities and will to promote vocational training and tends to put at risk the policy of equitable access to skills training in the states with poorer financial situations.

The state governments operate some 4,650 vocational training institutes, which have a total capacity of 678,000 training seats. Out of this, nearly 373,000 seats are in some 1,800 government ITIs, and the residual 305,000 are in 2,850 private Industrial Training Centres (ITCs). The number of industrial training institutes in India has shown a rapid increase with the current growth, however, being mostly driven by the private providers (see graph 3 below).

Graph 3. Growth of public and private training institutes over the last 50 years

Increasing role of private training provision

Due to budgetary constraints and increasing student demand for training, the need to introduce proprietary training institutes, frequently named Industrial Training Centres (ITCs) was recognized. They operate along common technical guidelines applied for public ITIs. The ITCs are given freedom to offer any trades for which they have to comply with the NCVT requirements, and be accredited. Private tuition fees in vocational training are not regulated in India.

One of the important trends observed by this study is the relatively diminishing role of the public training system. Table 3 reflects the numbers of enrolments and pass-outs in the three states covered by the study. It can be concluded that private training provision has grown far faster than public training provision. In Orissa and Andhra Pradesh, private training enrolments are two to five times greater than in public training.

Private training provision plays a considerably positive role since, without it, the national vocational participation would be much lower. In addition, youth would not be able to access vocational training in the districts without public training facilities. However, the slow growth of public training provision has its negative policy implications as it could seriously aggravate the problem of access to publicly funded training seats, while the uncontrolled growth of private training has resulted in considerable imbalances in the supply and demand of graduates (see section 2.2.3).

59 167 354 357 3561080

18872447

36654274 4465 4647

0

1000

2000

3000

4000

5000

1956

1962

1967

1972

1978

1982

1987

1992

1997

2000

2001

2002

YEAR

NO

. OF

ITIs

Gasskov.doc 13

Table 3. Public and private training provision in the three states of India (2002-03)

Public ITIs Private ITCs States

Number of units Annual sanctioned training seats

Number of units Annual sanctioned training seats

Orissa 24 6 200 131 11 950

Andhra Pradesh 82 14 440 471 52 740

Maharashtra 347 63 300 265 30 000

All India 1 800 373 000 2 850 305 000

State-wide, the development scenarios have been relatively similar in Orissa and Andhra Pradesh which experienced rapid increase and saturation of private training providers as well as an apparent decline of enrolments in public ITIs, while Maharashtra managed to ensure a slow growth of ITCs and maintained an almost flat number of sanctioned training places in public ITIs. These scenarios are discussed below.

The Institute Management Committees of ITIs

Efforts have been made to get industry representatives involved in the management and operations of ITIs through creation of Institute Management Committees (IMCs). 6 In Maharashtra, each IMC is supposed to involve some 11 members: four from industry, one from each of the following – employers’ association, Directorate of Vocational Education and Training, the ITI’s employees, trainees, District Employment Office, DGE&T, as well as the principal of the ITI.

However, the duties assigned to such Committees are advisory and technical rather than truly managerial. These involve implementation of income-generation activities, control of admission, assisting graduates to find employment, staff development, supervision of equipment, etc.

As IMCs are given no legal powers to make management, financial and staffing decisions, supervise performance of the principal and other staff, and manage assets of the institution, this structure has apparent constraints in having major impact on the operations of ITIs. Some IMCs in other countries are empowered to hire and fire staff, approve the plan of activities and strategically manage assets and resources.

6 Government Resolution, Government of Maharashtra, N. ITI-1002/89Voc-2, July 2002, Mumbai.

14 Gasskov.doc

Section 2. Efficiency of industrial training institutes

2.1. The evaluation methodology

2.1.1. Efficiency concept and indicators

The current study was undertaken to address the issue of efficiency. Efficiency is viewed as a combination of the internal and external efficiency that is described below.

Internal efficiency

Internal efficiency deals with performance and outputs of training institutions with regard to:

(a) the numbers of students enrolled and retained who successfully graduated; and

(b) utilization of capital assets and human resources in producing these outputs (see table 4).

Table 4. Indicators of internal efficiency of training institutes 1

Indicators Formula

1. Student retention rate Per cent of students who appeared for a trade test out of those enrolled at the beginning of the course

2. Student graduation rate Per cent of students who passed the trade test out of those appeared for the trade test

3. Utilization of the ITI seating capacity Per cent of the total number of sanctioned (planned) training places filled at the time of enrolment

4. Overall internal efficiency Per cent of the total number of sanctioned training places that produce graduates

5. Staff utilization Ratio: Full-time students to all staff Ratio: Full-time students to teaching staff

External efficiency

External efficiency deals with outcomes that reflect the impact of training on employability of graduates and therefore can only partially be controlled by training institutes. Table 5 below provides a structure of the external efficiency indicators.

1 In this study only three indicators listed as N.1, N.2 and N.5 were utilized.

Gasskov.doc 15

Table 5. Indicators of external efficiency of training institutes

Indicators Formula

1. Labour market success of graduates Per cent of graduates who are in wage employment, or self-employed or employer, or joined family business

2. Utilization of knowledge and skills acquired at ITI

Per cent of graduates who work in the trade in which they were trained or in a closely related trade

3. Satisfaction of graduates with the trade acquired

Per cent of graduates who reported high satisfaction or satisfaction with the trade acquired

4. Satisfaction of graduates with the training received

Per cent of graduates who reported high satisfaction or satisfaction with the quality of training

5. Satisfaction of employers with the skills of graduates

Per cent of surveyed employers reported high satisfaction or satisfaction with the skills of graduates that they employ

2.1.2. Evaluation instruments

The evaluation instruments involved four questionnaires aimed at:

(a) training institute survey (Annex 1);

(b) graduate survey (Annex 2);

(c) company survey (Annex 3);

(d) interview with the State Directorate of Technical Education and Industrial Training in each state.

The training institute survey

This survey aimed at assessing the internal efficiency of ITIs and ITCs. It was conducted through collecting and processing data supplied by the training institutes’ principals. The survey covered the training programmes that were delivered by each ITI and ITC in the years 1999 and 2000.

The graduate survey

The graduate survey aimed at identifying their major employment and other career destinations as well as satisfaction with the trade and quality of training received. The survey covered graduates of the above institutes who enrolled in 1999 and 2000. However the two-year and the three-year courses started in 2000 have not been covered as their graduates would have accomplished training immediately before the time of the survey. Tracer studies of graduates were conducted by the current students of their former training institutes.

The company survey

Companies reported on the current proportion of ITI graduates in their skilled workforce. They also supplied data on current recruitment policies regarding the skilled workforce. Company satisfaction with the quality of the ITI graduates was also assessed. Some companies were visited by the evaluation team and interviewed. This survey experienced problems as most of the companies surveyed had not recruited new workers since 1997-98 and could not in certain cases assess the quality of graduates.

16 Gasskov.doc

2.1.3. Coverage of the study

The three states – Orissa, Andhra Pradesh, and Maharashtra – were selected for this study for different reasons. The first two were covered by the ILO/MOL Employment Promotion Programme, while Maharashtra was selected as the larger state with a significant and advanced training system. It was assumed that, for cost- and time-related reasons, the evaluation in one state should not cover more than two to three districts. Usually one of the districts was the capital of the state, others were neighbouring district(s). The survey commonly covered all ITIs and ITCs in the districts selected for the survey. The companies were selected for the survey by the Directorates of Technical Education and Industrial Training of the respective states.

Sampling criteria for the survey

The following sampling criteria were agreed upon and applied whenever possible.

For the industrial training institutes:

– small and large training institutes (by enrolments);

– both, public ITIs and proprietary ITCs to be covered;

– those offering engineering and non-engineering trades;

– those assisted through the World Bank (WB) project and those that were not;

– institutions located in industrially advanced and backward areas;

– general ITIs as well as women ITIs (WITIs).

For companies:

– the companies should be known as employing training graduates in the past as well as assessed to take on apprentices under the Apprenticeship Act.

A sample for this study has covered 121 training institutes (78 public ITIs and 43 private ITCs). The evaluation of internal efficiency of training institutes covered 6,660 students of private ITCs and 17,900 students of public ITIs. The tracer study on the employability of graduates involved 8,510 students of public ITIs and 2,645 students of private ITCs. More than 70 industrial enterprises were surveyed. Annex 20 contains the list of training institutes, while Annex 21 lists the companies surveyed.

2.2. Principal findings

2.2.1. Training provision in the three surveyed states of India

2.2.1.1. Orissa

In the State of Orissa, there are 30 districts which are not equally covered by public ITIs. Three districts have no vocational training institutes at all. Some of the districts have no private ITCs, while some have no public ITIs. Training institutes offer 33 engineering and ten non-engineering trades. All of them are NCVT-level programmes, while the state-level courses have not been developed.

Gasskov.doc 17

A number of the permanent ITI staff positions have been frozen by the state government as an austerity measure. In 2001-02, out of 467 sanctioned posts, there were around 156 so-called vacant positions for which funding was not secured. In addition, there was a number of vacant positions for which funding was made available. Due to the budget shortfall, the capability of the public training system to enroll students has been effectively reduced. As a result, admissions were not made in 96 units with 1,288 seats. This means that the public training system’s capacity was underutilized by some 30 per cent. It was explained to the mission that the contraction of public training is a temporary event caused by budgeting constraints and that the situation may change in the future. Part-time teachers remain a possibility, however few of them were in place at the time of the study.

The above situation has also caused the ITIs to rethink their programming. Based on the student demand for training courses, some of them such as blacksmith, carpenter, tractor mechanic, and stenographer were qualified as unpopular and reduced or closed, while popular courses such as fitter, electrician, machinist, were expanded. 2

The slow growth of public training provision has given a further boost to the development of proprietary training institutions amounting to 131 in Orissa with the number of students reaching 11, 950, far in excess of that in the public ITIs. Although the private ITCs are to be equipped according to the standard course requirements, their infrastructure was found to be of lower quality. The ITCs in Orissa tend to offer only a few selected trades, namely, fitter, electrician, and welder which results in the over supply of graduates. Their instructors are mostly recent public ITI graduates with no experience, and this raises concerns. As wages paid by the training proprietors are very low, few people with industrial experience would accept working there as instructors. Training fees vary considerably from Rs.1,000 to Rs.20,000 for a two-year course. Because of the above, the quality of training tends to be lower. In addition, the ITCs mostly enrol students who got lower SLC marks and failed in the merit -based competition for publicly funded ITIs. However, in some ITCs, the applicant per training place ratio has been found rather large reflecting a healthy demand for training places.

2.2.1.2. Andhra Pradesh

There are 82 public ITIs in this state out of which 12 are Women ITIs (WITI). The overall seating capacity of public ITIs was assessed as being 21,750, while the seating capacity of the 471 private ITCs was thought to exceed 85,000. However, the theoretical seating capacity of public institutes seems to be much greater. Considerable training capacity in terms of buildings and equipment was developed during the WB-assisted project but currently remains underutilized. Because of the shortage of funding, the sanctioned training capacity continues to shrink and, by 2002, it had decreased to 14,445 in the government ITIs, and 52,740 seats in the ITCs.

In the same year, the total number of training applications was only 67,185, i.e. less than the number of sanctioned training places resulting in lower competition for publicly funded places. In 1999-2002, the average graduate pass-out rates was assessed as 57,7 per cent for public ITIs, and 38,3 per cent for ITCs. 3 The public employment and training system employs 156 staff at the State Directorate (Employment and Training), 106 staff were in four Regional offices and 4,061 were operational staff in 23 districts.

2 Report of the State Directorate of Technical Education and Industrial Training, Orissa, 2002.

3 Department of Employment and Training, Training Wing, Government of Andhra Pradesh, December 2002.

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Examples of training seats’ utilization

Examples of the enrolment situation in long-term regular courses at ITIs are:

– the Women ITI, Mallepally with 220 sanctioned training places that offers 27 trades, had 160 trainees;

– the ITI, Secunderabad with 490 sanctioned places had 228 actual students in 13 trades;

– the ITI, Alwal, with 100 sanctioned places had 45 students in 5 trades (71 had enrolled at the beginning of the course and 26 dropped afterwards).

The trends of training seats’ utilization

– Long-term regular programmes in basic industrial trades are becoming increasingly unpopular which is reflected in diminishing enrolments and high rates of drop-outs; as a result, public training capacity is considerably underutilized.

– The Government has started introducing 11 short-term (three month) courses for low- literate applicants in the existing industrial trades; applicants are required to pay fees of Rs.1,500 to Rs.2,000 per course; the intakes, so far, have been very small of two to five students per course; the short courses have low literacy requirements and can accept both the employees of micro enterprises and novices.

– The Government was considering closing some unpopular courses and introducing new trades.

– The ITIs are increasingly encouraged by the government order to generate revenues.

Private training provision

Andhra Pradesh has developed an enormous number (471) private training institutions. Although this has expanded the training markets and brought training closer to consumers, this number of private providers has made a negative impact on the demand-supply ratios for individual trades.

The situation with private training provision can be illustrated by the data on the H.E.H. The Nizam and Alladin Technical Institute that enjoys considerable funding from a private society, has a long experience of training, possesses solid equipment and premises and can afford charging students fees of only Rs.200 per month. Table 6 provides data on its regular NCVT courses that reflect a rather low demand. This ITC managed to enrol only 36 per cent of students as compared to the sanctioned seats, while by the end of the second year only around 15 per cent of students remained in the courses. To remedy the situation with the limited demand for NCVT long courses, this ITC has launched fee-financed six-month courses (2.5 hours a day) in regular trades in which, at the time of assessment, had 90 students.

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Table 6. Enrolments in regular NCVT courses in the Nizam and Alladin Technical Institute/private, Andhra Pradesh

Trade Sanctioned places

Year 1 Year 2

Electrician 40 19 16

Mechanic radio/TV 40 6 3

Machinist 30 6 2

Turner 30 1 –

Fitter 40 1 3

Electronics 20 20 –

Refrigeration and A/C 20 20 –

Total 260 93 41

It may be assumed that many private ITCs that have to charge considerable fees, will continue to close down as demand for long-term regular courses in industrial trades is diminishing rapidly.

Issues raised by the team at the meetings with the State Directorate have been:

– why low-literate students who enrolled in three-month courses in the public ITIs are charged fees, while all other students in the long-term regular courses receive training free-of-charge?

– why students of public ITIs (around 21,000) are provided training free-of-charge, while some 85,000 students of private ITCs who are also entitled to free-of-charge provision, have to pay fees? Would it not be fair if students of public ITIs also be charged some reasonable fee (let’s say, 20-30 per cent of the unit cost) excepting those who are the registered poor?

– whether the further increase of the operational autonomy of the ITIs would be able to strengthen incentives for improving their efficiency?

Example of the private training-cum-production centre, Jahanuma, Hyderabad

The team also visited the private training institute “The Boys Town” that was founded in 1959 as a charitable society and has developed considerable production-cum- training facilities. It had 340 students selected from the poor and offered a number of trades, eight of which were NCVT trades (225 sanctioned training places). This institution has been expanding its training and production capacity which will more than double in the forthcoming one to two years. Trainees pay no fees but live in a decent hostel and receive free meals. The quality of production is at the commercial level with certain mechanical parts and other products exported abroad or procured to industrial enterprises in India. The trades involve turner (including CNC-based), machinist, refrigeration and A/C, desk-top publishing, printing and binding, electronics, TV and radio repair, etc. Numerous letters are received by this centre where private businesses are asking for graduates and offer immediate employment. This institution has achieved its outstanding performance because of high operational and financial autonomy and the solid technical and managerial competence of its administrators. A combination of training and production has also proved to be an efficient way to develop crafts people and maintain a solid level of revenues.

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2.2.1.3. Maharashtra

This state has the largest public training provision with 347 public ITIs and 265 private training ITCs that are spread over 35 districts. Their annual sanctioned seating capacity is more than 93,000 with some 63,300 in ITIs and around 30,000 in ITCs. Some 56 ITIs have been upgraded under the WB-assisted Vocational Training Project.

As in other states covered by this study, public funding for training has been diminishing over the last several years resulting in the decrease from Rs.125 crore in 1999 to Rs.113 crore in 2003. 4 The total sanctioned staff of the state training system involved around 700 ITI principals and their deputies as well as 4,770 instructors. However, some 217 positions of principals and 800 instructor positions were vacant at the time of the study.

Over the last five years (1998-2003), this state has allowed a very moderate 10 per cent increase of sanctioned private training seats. The number of public institutes has increased from 238 to 265 while the number of sanctioned training places has decreased insignificantly from 64,100 to 63,400. 5 This situation suggests that the state government has been monitoring the situation carefully and managed to maintain a reasonable equilibrium of supply of graduates from public and private institutes.

The training programme change process

Around 200 training units (with 16 sanctioned training places each) in public ITIs that used to provide skills training for machine-shop associated trades were closed down in the last two years, while some 25 new units providing training in information technology, computer maintenance and other PC-related courses have been introduced. However, all the courses remain within the NCVT-determined trades as students do not undertake training that will not to lead to the National Trade Certificate.

The closure of courses has encountered serious problems of managing the staff, who had been civil servants. Some instructors from the closed courses have been assigned to the position of store-keepers, some have been transferred to other ITIs and a few were retrained. Currently, there are no temporary vocational instructors in the State who could contribute to the operational flexibility of public ITIs. Serious problems of closing courses have also been associated with the redundant training equipment that frequently can only be auctioned regardless of age and residual value.

Special features of the state training system are as follows:

– given the large number of ITIs, they are located deep into the suburban and rural areas and have the capability to reach out to the rural youth;

– the organizational structure is more complex than in other states as it involves six Regional Training Directorates with each being in charge of some, on average, 50- 60 public ITIs and 40-45 private ITCs located in five to six districts;

– there are also the District Vocational Education Officers who take account of the district skills development needs.

4 1 crore equals $200,000.

5 Study on efficiency/impact of ITI and ITCs, data by the Directorate of Vocational Education and Training, Maharashtra, May 2003.

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Training markets in Maharashtra

The ITI-based training system does not operate in a vacuum. Out of almost 800,000 school graduates at Grade 10, more than half attend general and specialist colleges, while vocational courses are offered by various agencies that sometimes compete for students (see table 7).

Table 7. Share of ITI training in the education and training markets in Maharashtra

No. Enrolments Share of the market (%)

1. High vocational schools (10 plus 2) 66 100 8.26

2. ITIs/ITCs 94 100 11.76

3. Short courses run by private training providers 92 100 11.51

4. Diploma-level courses run by polytechnics 29 500 3.68

5. Agricultural and related courses 19 890 2.48

6. General and specialist colleges 403 960 50.49

7. Total 705 650 100.00

The high vocational schools conduct courses in engineering and non-engineering trades like commerce, banking, agriculture, etc. These courses are regulated by the Maharashtra State Secondary and Higher Secondary Education Board. This Board also regulates college courses up to Grade 12. The ITIs/ITCs are regulated by NCVT, DGE&T and the State Directorate of Vocational Education and Training. The diploma-level programmes are regulated by the State Board of Technical Education. The short courses run by the private providers are usually non-regulated.

It seems that the state training system would be more flexible if a Board of Vocational Education and Training was set up with the functions of affiliation/disaffiliation of public and private training institutes, skills testing and certification of graduates, training quality control, development of skills training programmes for the organized and unorganized economy.

The revenue-generating scheme

The State Training Directorate has decided to limit the provision of the long-term training programmes in certain NCVT trades as the demand for skills at large enterprises has contracted rapidly and the pass-outs increasingly risk unemployment. 6 There was very low demand for certain NCVT trades like bakery, confectionary, fruit and vegetable processing and these trades were closed. In addition, due to the change of printing technology, the corresponding training courses were also to be discontinued.

Because of the lower admissions in the long-term courses, a considerable part of training equipment remained underutilized. Quite a number of turning laths remained idle or out of order while considerable space in workshops had no students. It is imperative to ensure greater efficiency of public investment in such assets and improve a capability of graduates to find remunerative activities.

6 Establishing Lok Seva Kendra in Government ITI, Department of Higher and Technical Education, G.R. No. ITI/1002/ (98)/VE-2, Mantralaya, July 2002.

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In order to utilize the training facilities efficiently, the Government empowered the ITIs to conduct short (three to six month) courses in basic trades according to student demand for them. Between January 2002 and April 2003, there were around 6,560 youth trained on such courses. Training fees were maintained at around Rs.300-400 per course. These activities were implemented by the ITIs under the so-called pilot ”Production-oriented training scheme” which aims to facilitate the introduction of new trades and achieve some recovery of the public training expenditure. The ITIs, when delivering courses under the above scheme, charge students the cost of raw materials and equipment depreciation. The labour cost for delivering short-term training courses is based on Rs.50 per hour. The amounts earned from depreciation of training equipment, as well as the overhead charges, are credited to the state government budget. Half of the revenue earned towards wage-related charges is credited to ITI development accounts while the other half is distributed among the administrative and teaching staff.

The development account can be disbursed only subject to the authorization of the State Director, Training, and a one-year grace period is established before any expenditure can be made. In addition to student fees, ITIs may undertake production work, rent out premises and machinery, and undertake other reasonable revenue-generation, while using the fixed arrangements for distributing the revenue. They can recruit production experts if need be. When revenues are earned through training-cum-production activities, trainees also become entitled to part of the revenue earned. 7

ITIs and the Government itself had an interest in ITI production, repair and services contracts from private agencies as well as from public institutions. Such contracts involve servicing air-conditioners and computers, production of wooden and iron furniture, etc. For implementing every training-cum-production work, a separate Working Committee was to be appointed in the ITI to ensure the flow of materials and semi-finished goods, payments and expenditures, storage and delivery. Participation in the above scheme was compulsory and each ITI was required to earn a minimum revenue of 10 per cent of its budget. The revenue collected is said to be used by the Government for procuring modern training equipment for the ITIs and also be spent on other projects. The revenue is collected by the ITIs, with part of it remitted to the state government. So far the Government has collected around $25,000 (Rs.12 lakh) of such revenues.

The Lok Seva Kendra Scheme provides short-term courses to promote self-employment. In order to efficiently utilize vacant training facilities, the Government has also introduced the self-employment promotion scheme that aims at ITI graduates, assists members of self -help groups under the SGSY scheme, 8 as well as school drop-outs. The District Development Committees have been formed with the aim to determine skills development and employment promotion needs. At their request, the 113 ITIs that have their own buildings, became involved in the delivery of short-term training and training-cum-production courses for the above target groups.

Groups of such trainees are requested to establish cooperative societies; this would enable them to use ITI facilities for production purposes. Special facilities are allocated for this purpose in each such ITI. The course duration varies broadly and curricula are designed by ITI staff without, however, any definite guidelines; this may, obviously, create a quality control problem. The participants of the Scheme are allowed to stay in the ITI for

7 Implementation of Production-Oriented Training Scheme effectively in Government Industrial Training Institute, Higher and Technical Education Department, G.R. No. ITI-1000/(302)VOC-1, Mantrlaya Annexe, February 2002, Government of Maharashtra.

8 A national poverty alleviation scheme operated by the Ministry of Rural Development of India.

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one to two years and should leave afterwards allowing places for new entrants. Such courses do not require high levels of general education and do not lead to the National Trade Certificate. Trainees are charged fees that are established on the basis of rules applied for the above revenue-generating scheme.

Such courses are also conducted for people who already work in the unorganized sector and who are willing to speed up their training or acquire some theoretical knowledge enabling them to sit for a National Trade Test. Training is usually conducted in the evenings or at week-ends. In the last 12 months, around 1,000 boys have received such training.

Improving efficiency through delivering short courses in the ITI, Ambernath

The approach to utilize the ITIs’ spare space and equipment and generate revenues through the provision of short courses could be illustrated by the experience of the largest ITI, Ambernath, Maharashtra. Short courses generate considerable revenues for this ITI. For instance, 118 students in the CNC training course generated more than 118,000INR, while 70 participants in the computer hardware course generated 153,000 INR. More than 2,400 students in the computer literacy course brought 38,52,000INR. The revenues have been spent on setting up a laboratory, development of a meeting hall, audio-visual facilities, a modern tools room, a CNC training centre. From all sources of revenues generated in 2002-03, this institution has been able to credit its development account with the amount of INR21.3 lakhs.

In Maharashtra, overall, some 44 short courses in electrical, electronics and TV, civil engineering, fashion design and dress making, art work, refrigeration and air conditioning, automobile, and computer trades have been developed and offered in the market in subjects that may not necessarily lead to employment or self-employment but also enable implementation of some work in households, or add some expertise to the existing personal competence (for the list of short courses see Annex 15).

Community services centre as an entry point to self-employment

Community services centres have been established in a number of ITIs enabling them to obtain orders from the communities for plumbing, painting, masonry, welding and wood-work, etc. and implement this work by former graduates on equipment available in ITIs. This has resulted in a more efficient utilization of the premises and equipment and strengthened the abilities of ITI graduates in starting up their future businesses.

The following work groups have been established in this community service centre: cutting and tailoring (41 former graduates), electrician (28), carpenter (21), radio, TV and electronics (21), refrigeration and A/C (18), painting (9), motor mechanic (7), a construction multi-skilled group involving mason, plumber (39), welders (18), etc. In addition, more than 50 short-term training courses have been organized since 2001. In these courses around 520 people were trained resulting in revenues of INR4,79,94 (around $10,000). These courses enabled ITI former graduates to become more employable and to start their small businesses (for more details on the experience of ITI, Ambernath in developing community services, see Annex 16).

Our assessment of the above developments

The purpose of the above schemes is mainly to utilize ITI premises and equipment more efficiently and to promote self-employment of former graduates. The autonomy of ITIs has been increased through:

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– introduction of ITI Management Committees where people from industry participate;

– opening ITI bank accounts which accumulate development funds;

– authorizing ITIs to generate and manage their revenues enabling the recruitment of instructors and other staff for short-term courses that are revenue-financed.

In spite of the considerable advantages of improving efficiency that are documented above, the above management practices in ITIs have some weaknesses that need to be overcome. These weaknesses involve:

– continued low flexibility in launching new regular (long-term) courses as ITI core staff are civil servants and cannot be replaced with new instructors rapidly;

– utilization of revenues accumulated in ITI development accounts is subject to the approval of the state authorities which may not be able to realistically handle this process on a case-by-case basis as there is a very large number of ITIs;

– ITI Management Committees remain weak as they do not really have management functions; as a result, they have not been deeply involved in the efficiency improvement process although they participate in decisions on revenue utilization;

– ITI budgets remain part of the government budget with the bills for water, electricity, building repair, etc. paid for by the state government. Therefore only part of ITI operations have been covered by the efficiency improvement concerns, while the modern trend is to establish public training institutions as autonomous, flexible and market-oriented institutions that would require them to be more independent from government.

Improving supervision of private ITCs

The system of five-level grading of private institutions was introduced in Maharashtra with grades assigned annually to each ITC. This grading is published in the newspapers. The ITCs that are unable to improve their low grading, risk becoming disassociated from the State Training Directorate, losing thereby the right to deliver NCVT-level skills training. As the cost of supervising ITCs remains very high and greater human and financial resources are needed, it is advisable that an annual maintenance fee should be levied on ITCs to enable the generation of resources for their training quality control services.

2.2.2. Diminishing demand from organized industry for training graduates

Availability of jobs

ITIs have played a considerable role in producing a skilled workforce for the organized economy. Our surveys of large enterprises in the organized sector revealed that some 3-30 per cent of all employees and some 10-20 per cent of skilled workers have been trained in ITIs. Annex 8 summarizes our findings of the industry-wise distribution of ITI graduates as a proportion of the workforce and of skilled workers.

The economic situation has been changing rapidly in India. Both public and private industrial companies interviewed reported no or few employment opportunities. The organized economy currently has extremely limited employment potential. For instance, in Orissa, the public and private companies interviewed, both large and small, do not recruit any new workers and have not recruited anyone since 1997. Moreover, they plan to

Gasskov.doc 25

retrench the labour force further by 20-40 per cent in some three to four years in order to sustain competition. It was only the aluminium processing plant in Orissa that informed the mission of their plan to launch a new production site and recruit more workers.

This situation raises the issue of relevance of training courses to the current situation in the local labour markets. The majority of training institutes continue to focus on producing basic industrial skills, such as fitters, welders, etc., that are long-term and orientated towards formal employment. Given the current employment environment, the programmes should be reviewed to improve graduates’ job success. In Orissa, the ITI principals interviewed acknowledged that the current occupations offered by their institutes provided very little, if any, job opportunity. They proposed the following trades that could be relevant to the local labour markets: two-wheeler mechanic, handicraft worker (carving on stone that is a historically popular trade), multi-skilled fabricator, etc. However, it seems that the duration of training programmes remains a major problem as a majority of young people look for shorter courses that more flexibly reflect job possibilities.

Employment practices

The principal comment received from companies is that they do not consider the ITI graduates as suitable for immediate employment. They accept graduates only as apprentices and train them for two to three years after which they may be considered fit for employment. Therefore the total period of skills training involving the ITI-based as well as on-the-job may amount to four to six years, a rather long period of time, ending up with small salaries. Self -employment therefore could be a much shorter way to enter the labour market. The combined duration of ITI-based training and of apprenticeship also suggests that NCVT courses are extremely long and generate very few incentives for young people to invest in training. There is a clear need to rationalize the total period of training and review the apprenticeship schedule and content enabling integration of ITI courses with apprenticeships. The total period of ITI-based training plus apprenticeship should be within two to three years and lead to the skilled worker qualification.

ITI graduates compete for apprenticeship places as it seems that being an apprentice and earning an allowance of around Rs.1,000 a month is better than being unemployed which is a widespread situation for ITI graduates. As students of public ITIs are those with educational merits, they also have an advantage in competing for apprenticeship places. However, although companies accept very large numbers of apprentices under the requirements of the Apprenticeship Act, this study suggests that they provide them with few jobs.

Even assuming that the graduate apprentices would eventually find employment in the informal economy, then the apprenticeship training/placement procedures should also be reconsidered. The apprentices who undertake training in large companies usually operate special equipment. They therefore risk wasting time in practical training as such equipment is not available in micro enterprises where the major job opportunities are supposed to occur.

2.2.3. The problem of training supply and demand imbalances

This study attempted to examine whether the programming of ITI courses at the state level is based on the assessed potential demand for skills. The current practice is that the ITI training programmes are decided centrally, by State Directorates Technical Education and Vocational Training and obviously do not match the local demand for skills. No professional labour market assessment surveys have been applied to monitor training demand. Nor has graduates’ labour market success been examined. As a result, the ITI

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courses continue to have only far-fetched links with local labour markets. For instance, a number of courses suitable for advanced industries, such as electronics-mechanics, are conducted in ITIs located in semi-rural areas.

The quality of training planning was assessed through calculating the supply-demand ratios for different trades in districts of the three states under the review. The supply-demand ratios trade-wise are presented in Annexes 9, 10 and 11. Potential demand for graduates in individual trades was assessed as a number of people currently employed in each trade in the organized sector for which data were available under the requirements of the Apprenticeship Act. The supply of graduates was assessed as combined graduations in each trade from public and private institutes operating in the same districts. As data on numbers of graduates were not available, they were assessed on the basis of trade-wise enrolments and further adjusted to take account of actual graduations on the basis of internal efficiency indicators calculated by us for public and private training institutes in each of the three states (see Annexes 5, 6 and 7). 9

Data suggest that in the two districts of Orissa, the training provision is dominated by several trades, such as fitter, electrician, welder, etc. Annex 9 illustrates the occupational structure of the organized sector enterprises against the annual supply of graduates by public and private institutes in the same trades. The supply-demand ratios for the trades of welder (0.56), fitter (0.77), electrician (0.61), and electronic mechanic (0.49) indicate that each year the numbers of graduates produced amount to almost half of the people employed in the above trades. These ratios are extremely high even assuming there is a sizable demand for these trades in the unorganized sector. Our experience suggests that reasonable supply-demand ratios should be 0.1 and below. As a consequence of the over supply of graduates in the above trades, they face an increased risk of unemployment. This seriously impacted on the external efficiency of training institutes.

Moreover, interviews with HRD managers of 20 industrial enterprises in Orissa revealed that in most of them there has been no fresh employment of crafts people for several years. Vacancies appearing because of retirement have been frozen for employment. Given the above findings, the course enrolments offered by both ITIs and ITCs should be reviewed with a significant focus shifted towards training in non–industrial or new industrial trades for which the labour market is not saturated.

The supply-demand ratios calculated for five districts of Andhra Pradesh indicated that supply-demand ratios for trades like draughtsman-civil were close to 1.0. This means that annual numbers of graduates in those trades almost equal the numbers of people employed in these occupations. The above imbalances in the supply of graduates have mainly occurred because of the uncontrolled enrolment in private ITCs. On the other hand, supply of metal sheet workers (0.01) and carpenters (0.03) seems to be rather small as only one to three semi-skilled workers are produced per 100 people employed. The ratios for turners (0.08), machinists (0.07) and motor mechanics (0.12) look reasonable (see Annex 10).

In the three districts of Maharashtra, the supply-demand ratios look balanced (see Annex 11). The employment status of graduates trade-wise is given in Annex 12. The best employability was found with graduates trained as refrigeration and A/C mechanics (supply-demand ratio: 0.22) and welders (0.21). The least employable were fitters (0.13) and electricians (0.16). It could be that the capacity of the unorganized economy to employ

9 The overall internal efficiency reflects a percentage of training seats that eventually produces graduates. For instance, on average in Orissa, 73.8 per cent of students enrolled at public ITIs and 90.9 per cent of students enrolled in private ITCs, eventually graduate.

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the refrigeration and A/C mechanics and welders is larger than that for fitters and electricians. This would explain why trades with higher supply-demand ratios showed better employability. On the whole, it seems that supply of graduates from both private and public institutes has been monitored carefully in this state enabling a reduction in the risk of graduate unemployment.

Conclusions

The following conclusions could be made:

First, the above imbalances of supply of graduates and demand for them may only be corrected through regular surveys of both organized and unorganized sectors as well as of the graduates’ labour market destinations and making judgments on the best mix of training courses.

Second, the growing and uncontrolled enrolments in private ITCs may increasingly cause serious distortions to the supply-demand ratios of the skilled workforce as proprietary institutes pursue their own objectives and are less concerned with the labour market situation.

Third, more accurate planning of training would require knowledge of the occupational structures of the unorganized economy and of the role of training institutes in supplying the workforce to it.

Fourth, although the number of jobs existing in each trade does not suggest the availability of vacancies, nevertheless, the common rule of training programming is that supply of graduates should reflect the occupational structures in outreach areas to the extent possible. Special cases are new industrial projects or forecasts that (can) change the occupational structures and induce demand for new trades.

Fifth, the above situation of mismatch is aggravated by some other serious factors such as: (a) shortage of government funding for replacing training programmes (equipment, machines, training materials, etc.); and (b) low staffing flexibility because ITI teaching staff are civil servants who cannot be easily moved or replaced by other instructors needed for implementing new training courses.

As will be proposed in section 3, the major role in identifying demand for skills and implementing planning of training should be assigned to the ITIs themselves. They should be given greater autonomy and offered considerable incentives for achieving better results. They need to be financed according to their performance and would have operational flexibility to change their courses and manage enrolments.

2.2.4. Internal efficiency of training institutes

The aggregated data on the internal efficiency of public ITIs are summarized in table 8. They are calculated on the basis of non-weighed averages for samples in the three Indian states. The more accurate trade-wise data on the internal efficiency for both public ITIs and private ITCs are presented in Annexes 5, 6 and 7.

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Table 8. Internal efficiency of public ITIs in the three states of India (sample averages, all trades)

Internal efficiency

Indicators Formulas Orissa(%)

AndhraPradesh

(%)

Maharashtra (%)

1 Student retention rate % of students who appeared for a trade test out of those enrolled at the beginning of the course

80.9 68.3 85.6

2 Student graduation rate

% of students who passed the final trade test out of those appearing for the trade test

88.3 62.9 77.5

3 Utilization of the seating capacity

% of the total number of sanctioned (planned) training places filled at the time of enrolment

102.1 77.4 92.2

4 Overall internal efficiency

% of the total number of sanctioned (planned) training places that produced graduates

73.8 31.8 62.6

5 Staff utilization Ratio: Full-time students to all staff Ratio: Full-time students to teaching staff

9.317.7

5.59.9

n.a. n.a.

Internal efficiency of training institutes, Orissa

The internal efficiency of training institutes in Orissa was evaluated for some selected trades on a sample of 4,190 public and 1,430 private students (see Annex 5). The efficiency indicators show high readings with the most important overall internal efficiency indicator based on a percentage of sanctioned training places that eventually produces graduates scoring as high as 88.3 per cent for public and 95.6 per cent for private institutes.

Data suggest that around a quarter of sanctioned training places in public ITIs do not produce graduates. The lowest overall internal efficiency (60-70 per cent) was found for the turner, pump operator-mechanic, sheet metal worker, draughtsman-mechanical and mechanic-tractor training courses, while for stenography the rate did not exceed 50 per cent. These programmes should be reviewed in order to assess the need for their continuation or improvement.

Efforts have been made by ITIs to enrol some 10-15 per cent more students than the sanctioned training seats in order to improve rates of internal efficiency. However, for some trades, such as stenography, cutting and sewing, and computer operator and programming assistant, the initial enrolments of students remained rather low preventing an improvement in efficiency.

The retention rates for such trades as sheet metal worker, pump operator, electronic mechanic and draughtsman-mechanical in the public ITIs remained equal or below 70 per cent reflecting low interest of students to continue their studies. This finding may have a lot to do with either quality of training or disappointment of students with the availability of jobs. The graduation rates suggest that the turner, machinist, welder, plumber and mechanic (diesel) training courses, where the graduation rates stayed between 70 per cent and 85 per cent, have been unable to ensure sufficient quality of instruction. In that sense, ITCs’ courses in fitting, electrician, and cutting and sewing have been more efficient than in public ITIs.

Internal efficiency of training institutes, Andhra Pradesh

In Andhra Pradesh the internal efficiency evaluation sample amounted to 4,100 public and 2,730 private students (see Annex 6). The overall internal efficiency data suggest that only one-third of sanctioned training seats in public ITIs and around half of the seats in private ITCs produced graduates. The reason for this is a combination of low enrolments, low student retention and graduation rates. The most unpopular public courses were: carpenter (14.2 per cent), electrician (26.3 per cent), COPA (27.3 per cent) and welder

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(28 per cent) where less than one-third of training seats used delivered graduates. Private ITC courses in the electrician, mechanic diesel and turner trades were much more efficient.

Internal efficiency of training institutes, Maharashtra

A sample involved 9,600 public and 2,500 private students (see Annex 7). The overall internal efficiency indicators show that only two-thirds of sanctioned training places produced graduates. The poor performing and probably unpopular public courses involved: masonry (42 per cent), machinist/composite (45.7 per cent), turner (46 per cent), mechanic-radio and TV (45.7 per cent), and mechanic-refrigeration and A/C (45.7 per cent). The best performing public courses were COPA (88.2 per cent) and welder (78.8 per cent). ITC courses for electrician, mechanic diesel, turner, machinist-composite and draughtsman-mechanical were more efficient than in public ITIs.

Comparison of internal efficiency of ITIs and ITCs

Comparison of internal efficiency suggests that for the same selected trades, the overall internal efficiency at private ITCs was better by, at least, 10-20 per cent. This output was supported by higher average retention rates, and a little better graduation rates. The ITCs also enrolled slightly more students as compared to the sanctioned training seats. Certain advantages of internal efficiency demonstrated by ITCs should probably be attributed to the fact that students pay fees for their training and would tend to be more cautious in selecting trades and more reluctant to drop from programmes, thereby losing their investment.

Comparative efficiency of staff utilization in ITIs and ITCs

Internal cost-efficiency of training institutes was partially assessed through comparisons of the student-to-all staff ratio and the student-to-teaching staff ratio (see table 9). 10 Both ratios for public institutes in Orissa appeared to be much better (more students are served by one teacher/staff member) than for private institutes, while for Andhra Pradesh, the trend was the opposite. The cost-efficiency problem of ITCs may be caused by low average student enrolments that prevent them from reducing the unit cost of training. Of course, numbers of students and staff do not reflect the true cost of training as instructors at ITCs are said to be paid much lower salaries than at public ITIs.

Table 9. Internal cost-efficiency of public and private training institutes

States Student-to-staff ratio Student-to-teaching staff ratio

Public ITI Private ITCs Public ITI Private ITCs

Orissa 9.3 5.4 17.6 7.8

Andhra Pradesh 5.5 9.6 9.9 13.3

Maharashtra n.a n.a n.a n.a

Limited internal efficiency of women ITIs

Women ITIs (WITIs) featured particularly low efficiency as compared to common training institutes. Enrolments in WITIs were rather low and the female students interviewed complained that training courses offered to them reflect certain stereotypes. The students, as well as their parents, would prefer co-education of boys and girls. The

10 The formula applied running numbers of students who were on the programmes at the time of assessment.

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Women ITI, Dhenkanal, Orissa is one example of low efficiency. Out of the 32 training seats sanctioned, only a few were filled by students, many of whom dropped out soon after enrolment.

In Orissa, women continue to have very low participation in vocational training although ten public WITIs were set up. In addition, seven private WITIs were approved. The number of sanctioned training places in WITIs was 912, while the number of women training places in common ITIs was 350. A discouraging observation was that all principals of the WITIs were men. The State of Orissa’s policy has been to increase the seating capacity of the WITIs in order to achieve women’s participation to up to 25 per cent of all training places in the state.

It seems that the above policy to promote separate women training institutes may be rather inefficient. The female enrolments have been impaired by various factors, such as the non-availability of hostels, poor transportation, a too limited number of trades offered in WITIs, security issues, etc. Given these limitations, it could be more cost-efficient to increase the allocation of training places to women in common ITIs rather than to build/set up separate WITIs. The existing WITIs could be converted into common ITIs with a considerable share of training places reserved for girls. The WITIs introduced during the WB-funded project are said to have played a positive role by increasing girls’ vocational participation. However, in the increasingly modern environment of India, co-education would bring more advantages, such as better utilization of training facilities, availability of more trades for girls, as well as satisfaction of their interest in fair competition with boys. The implementation of this proposal would, of course, be possible in the locations where, for cultural reasons, parents and students would not oppose it.

2.2.5. External efficiency of training institutes

2.2.5.1. Readings of efficiency indicators

External efficiency refers to the outcomes achieved by training institutes. The major outcomes reflect:

(a) the labour market success of graduates (impact of training on the employability of graduates), and

(b) the graduates’ capability to utilize the acquired knowledge and skills in their post-training activities.

External efficiency therefore depends on the labour market situation and can only partially be controlled by training institutes. Tables 10 and 11 provide aggregate readings of the external efficiency for public ITIs and private ITCs.

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Table 10. External efficiency of public ITIs in the three states of India (all trades)

Indicators Formulas Orissa1

(%)Andhra Pradesh

(%)Maharashtra

(%)

1. Labour market success of graduates

Per cent of graduates who were in wage employment, self-employed or employer, or joined the family business

16.2 41.0 35.7

2. Utilization of knowledge and skills acquired at ITIs

Per cent of graduates who used to work in the trade in which they had been trained or in closely related trades

n.a. 66.5 70.8

3. Satisfaction of employers with skills of graduates

Per cent of surveyed employers reported high satisfaction or satisfaction with the skills of graduates

88.9 100 89.5

1 In the evaluation of ITIs in Orissa, the question regarding the graduates joining their family businesses was not asked. This has affected the reading of the indicator of labour market success of graduates. For the breakdown of this indicator see table 12.

Table 11. External efficiency of private ITCs in the three states of India (all trades)

Indicators Formulas Orissa1

(%)Andhra Pradesh

(%)Maharashtra

(%)

1. Labour market success of graduates

% of graduates who were in wage employment, self-employed or employer, or joined the family business

21.3 22.8 35.6

2. Utilization of knowledge and skills acquired at ITIs

% of graduates who used to work in the trade in which they had been trained or in closely related trades

n.a. 27.2 70.3

1 Same note as in table 10 applied regarding ITCs.

The above data show a very large variation in the labour market success of graduates being, for both public and private institutes, between some 15 and 40 per cent. The utilization of skills acquired in training institutes was up to 70 per cent. Employer assessment of ITI graduates was high, while they barely had any opinion about ITC graduates. For detailed discussion and breakdown of data, see the section below.

2.2.5.2. The employment status of graduates

The employment status of ITI graduates involve five major possibilities:

– salaried job in the organized sector;

– employee in the micro enterprise or launching a small business;

– joining a family business;

– not working and looking for work (the unemployed);

– not working and not looking for work.

Another type of post-training options relates to: education and training (including apprenticeship), doing domestic work and any other activities that are outside the labour market. The problem of placement of ITI graduates was, to a considerable extent, mitigated by the fact that large numbers of graduates continued their training as formal

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apprentices. 11 In addition, a limited number of training places (some 5 per cent) is commonly reserved for training graduates for the diploma-level programmes at polytechnics. Therefore, the majority of training graduates were expected, sooner or later, to be found in one of the two abovementioned ranges of major destinations.

Table 12 provides the distribution of graduates of public ITIs and private ITCs by their employment status for the most popular trades. Data suggest that many graduates were unable to set up their own micro enterprises but found it easier to assist their parents in their jobs/small businesses. This avenue for entering the labour market was particularly significant in Andhra Pradesh where the number of graduates who joined family businesses was almost equal to those who were in wage employment.

Table 12. Employment and education and training status of graduates, all trades (percentage of all graduates interviewed)

States Wage employment (%)

Self-employed or employer (%)

Assisting parents in doing their job/business (%)

Doing polytechnic (%)

Doing apprenticeship (%)

Unemployed and those who were not looking for employment (%)1

ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs

Andhra Pradesh 16.2 6.5 13.1 3.3 11.7 13.0 2.7 1.1 27.4 2.2 28.9 73.9

Maharashtra 18.4 27.8 11.7 7.8 5.6 6.1 2.8 2.5 38.7 29.2 22.8 26.6

1 This column reflects proportion of the unemployed graduates (those who were “Not working and looking for employment or self-employment” as well as of those who were “Not working and not looking for employment”).

In Maharashtra, around 36 per cent of public training graduates and around 42 per cent of graduates of private training institutes were in various forms of wage employment and self-employment including assisting parents in family businesses. In Andhra Pradesh, involvement of public graduates in various forms of work-related activities was around 41 per cent, while for private graduates this figure was considerably lower being around 23 per cent. The share of the unemployed among all graduates in Maharashtra was between 23 and 27 per cent, while in Andhra Pradesh, around one-third of public graduates and more than 70 per cent of private graduates reported unemployment.

The employment status of training graduates of Maharashtra, trade-wise is given in Annex 12. The best employability was found with graduates trained as refrigeration and A/C mechanics and welders. The least employable were fitters and electricians (for discussion of supply-demand imbalances see also section 2.2.3).

2.2.5.3. Utilization of knowledge and skills acquired in training institutes

Utilization of skills acquired in training is another important subject of this study. Table 13 suggests that, in Andhra Pradesh, around two-thirds (66.5 per cent) of graduates of public ITIs were successful in utilizing knowledge and skills, while only about one- third of private ITC graduates were able to make use of their skills at work. These data

11 The team felt the need but was unable to undertake an additional study on labour market destinations of graduate apprentices who had accomplished their training at enterprises and are considered skilled workers.

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correspond well to the high unemployment rate of private graduates in this state (see table 12). Moreover, almost half of private graduates in this state reported that skills acquired were of little or no use to them.

In Maharashtra, on average, around 68 per cent of all graduates reported their utilization of skills and knowledge acquired in training institutes. These data, combined with the data on shares of employed and self-employed graduates (see table 13), suggest that quality of training in private institutes in Maharashtra compares well to that of public ITIs.

Table 13. Utilization of knowledge and skills acquired in training institutes (percentage of all graduates interviewed)

States Graduates who had worked in the trade in which they had been trained (%)

Graduates who had worked in a different trade which allowed to utilize acquired skills (%)

Graduates who had worked in a different trade to which training was of little use (%)

Training acquired was of no use (%)

No answer 1

ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs

Andhra Pradesh 48.2 23.9 18.3 3.3 6.4 25.0 6.4 22.8 20.7 25.0

Maharashtra 59.9 62.7 10.9 7.6 6.9 6.9 8.3 12.2 14.0 10.6

Many graduates had difficulties in answering this question, probably because they did not have a chance to put their knowledge and skills to work.

2.2.5.4 Main activities of graduates who were not in employment or self-employment

Findings presented in table 14 suggest that, on average, some 40 per cent of public ITI graduates who were not in employment or self-employment were involved in further education and training, while around 53 per cent were mostly involved in unpaid domestic work. Private training graduates, particularly in Andhra Pradesh, were far more likely to be involved in domestic work rather than in further education, giving some hint about the quality of training in ITCs.

Table 14. Major activities of graduates who were not in employment or self-employment

States Continue education, training, apprenticeship (%)

Doing mostly domestic work (%)

Doing something else (%)

ITIs ITCs ITIs ITCs ITIs ITCs

Andhra Pradesh 40.0 13.0 52.4 81.5 7.6 5.5

Maharashtra 40.9 32.3 53.6 57.1 5.5 10.6

Table 15 provides further clarification on the type of further education. Around one-third of all ITI graduates were in apprenticeship. In Andhra Pradesh, however, very few private graduates seem to have been able or willing to enter apprenticeship. One of the reasons for this could be unequal conditions of access of public and private graduates to the apprenticeship vacancies.

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Table 15. Major forms of further education and training of ITI graduates (percentage of all graduates who responded)

Polytechnics Apprenticeships Some other type of education

Some other type of skills training

States

ITIs ITCs ITIs ITCs ITIs ITCs ITIs ITCs

Andhra Pradesh 2.7 1.9 27.4 2.2 19.3 32.6 11.2 6.5

Maharashtra 2.1 2.5 38.7 29.2 7.4 3.9 1.6 1.4

2.2.5.5 Limited role of training institutes in producing skills for the unorganized sector

The data presented in table 12 suggest that the role of training institutes in producing skilled labour for unorganized economy is very limited. The share of ITI graduates who entered self-employment or became employers was on average 12 per cent, while, only around 5 per cent of ITC graduates joined the unorganized economy. Data provided in Annex 12 allow identification of the trades that had greater self -employability – electricians, electronic mechanics and welders were among those.

Multiple interviews conducted with staff and graduates of training institutes also allows us to conclude that this role has so far been very limited. Annex 18 presents opinions of the group of graduates of private ITCs in Maharashtra which illustrate this point.

The above data correspond well to the findings of the ILO reverse tracer study of 880 small businesses conducted in District Muktsar/State of Punjab. This study revealed that the share of ITI graduates in mechanical and electrical trades in those micro enterprises was only around 8 per cent. Training graduates were not found in any other trade. 12 Therefore, the expectations that training graduates enter broadly the unorganized economy were not confirmed.

There are several reasons for ITI graduates not being absorbed by the unorganized sector. First, participation in the informal sector businesses involves much more than simply possession of an occupation. For those graduates who wish to start a business, it mainly requires a business idea, access to a market location, finance, and clientele – things that young people generally lack.

Second, ITI graduate occupations seem to be too narrow to be readily applied in small businesses. Micro enterprises are too small to exercise a division of work, while large companies are capable of this. The problem is that the formal training institutes continue to focus on employment rather self-employment. ITI students had a strong hope that they would find salaried jobs and preferred to acquire narrow but recognized qualifications. Some ITI principals suggested that there is a need to introduce an occupation of a fabricator that would be truly a multi-skilled occupation giving an advantage in entering the informal economy.

Third, evidence gathered by the above-mentioned study of Punjab also suggests that the market supply of services in the unorganized sector is becoming saturated, with the consumer load indicator for many services being rather low. This affects the employment

12 V. Gasskov and M. Burns: “Training for employment promotion in Muktsar District, Punjab”, ILO, SAAT, New Delhi, December 2001.

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opportunities for ITI graduates. This comment was also made by participants of the meeting of graduates working in the unorganized economy (see Annex 18).

Fourth, the unorganized sector commonly offers low quality jobs without any kind of employment/social security and rather low wages and prestige that may be less acceptable to the educated and trained ITI graduates, and even more so to the graduate apprentices. As a result, the principal way of acquiring occupational skills in small businesses in India remains the traditional apprenticeship (ustad shagird) route, where apprentices work for one to two years for a master and learn a trade on the job.

If ITIs were able to train the less educated young people with lower job expectations for the unorganized economy, this would have a much greater impact on the workforce in this sector. Therefore, the introduction/expansion of shorter vocational courses for the less educated who are satisfied with the conditions and wages of the unorganized sector would enable the informal economy to improve productivity and quality of services. More importantly, it would have improved the operational efficiency/impact of training institutes as a greater proportion of their graduates could find jobs.

2.2.5.6 Employer assessment of skills shortages

Most of the interviewed companies with relatively low-skills jobs reported satisfaction with the trained ITI graduates. The frequently expressed wish of those companies was the multi-skilling of workers, enabling them to be better utilized, and a reduction in labour costs. However, the companies with sophisticated technologies and high skills jobs such as Nava Bharat Ferro Alloys Ltd, and Orissa Polyfibres admitted that the ITI graduates’ skills do not match their job requirements. A long period of time was required involving apprenticeship and a further one to two-year probation period after which the final judgement regarding their employment would normally be made.

Table 16 suggests that certain skills shortages do exist as some 20 per cent of companies did experience frequent problems with finding employees with required skills. More than half the companies experienced this problem occasionally. For instance, the major skills shortages referred to by companies in Orissa were instrumentation (33 per cent of firms), fitter with maintenance skills (22 per cent), electronics (22 per cent), boiler attendant, computer hardware, computer operator, specialist welder, mechanical trades. In Maharashtra, the trades in short supply were welders, painters, air conditioner mechanics, CNC operators, tool and die makers, machinists, chemical plant maintenance, COPA, electroplaters, etc. They are all trades that could be delivered by training institutions as regular NCVT courses. The reason for short supply of graduates is unsatisfactory management of supply of training graduates.

Table 16. Share of companies that experienced problems of finding employees with required skills

States Never(%)

Occasionally(%)

Frequently(%)

Orissa 11.1 66.7 22.2

Andhra Pradesh 16.7 58.3 18.0

Maharashtra 43.8 43.8 12.4

Annex 13 summarizes the employer opinions regarding the skills areas in which ITI graduates are said to be under-performing. Not surprisingly, most companies mentioned the use of computers, practical use of machines, use of drawings. In addition, 60 per cent of companies wanted the ITIs to train young people in labour law and industrial relations, communication and team work practices.

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Skills shortages were also assessed, along the same lines, by graduates themselves who admitted that training in the use of computers, use of machines, and equipment maintenance are apparent weaknesses of ITI operations and need to be improved (see Annex 14).

2.3. Summary listings of findings

2.3.1. Training policy challenges

Lack of employment orientation

The national training system of India is not perceived as employment-oriented as there appears to be a lack of local effort and capability to assess the changing demand for skills and translate this knowledge into programming of courses and managing supply of graduates from both public and private training institutions.

Decline of demand for long-term NCVT courses in basic trades

As there has been a continuing downsizing of the organized economy and its capability to employ training graduates, a very small share of them were able to secure wage employment or enter self-employment. As a result, the demand for ITI long-term NCVT training programmes has shown an apparent decline.

Diminishing role of the public training sector

Because of the shortage of funding, public training systems of the examined states have been reducing their staff and enrolments, or showed zero growth as compared to population growth. As levels of government funding remain low, they were provided with insufficient support for equipment, materials and introduction of new and better training courses, while in some states, public ITIs have no freedom to generate revenues in order to improve their assets and operations.

The relative decline of public training provision was compensated for by largely uncontrolled growth of private ITCs. This development model tends to negatively impact on the overall national training quality. The rapid growth of private-for-profit institutions also leads to the increased public cost of their accreditation, control and supervision that further depletes the public resources available for managing public ITIs.

Insufficient role of public ITIs in skills training for the unorganized economy

The vocational training system of the nation, where 92 per cent of the workforce is in the unorganized sector, continues to focus on the organized sector of the economy that is currently showing a very low capability to employ graduates. The training system was unable to provide mass support to developing the skills of workers operating in the unorganized economy where the largest employment opportunities are said to exist.

The majority of ITIs are established in urban areas and serve mainly the urban, wealthier and more educated youth, while the majority of rural youth, particularly with low educational levels, are left without access to skills training and, therefore, income- generating opportunities. The way the ITIs are distributed between districts is said to frequently reflect politically influenced decisions rather than based on technical rationale. Historically, ITIs were supposed to strengthen urban industrialization and were never intended to provide skills training to the rural poor.

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Expansion of the role of ITIs in developing skills for the unorganized economy remains a considerable policy and operational challenge. The national training policy does not focus on this important target. Nor is the training system designed to address the skills problem of the unorganized economy. As a result, the objectives of publicly funded training no longer reflect the realities of the labour markets where the unorganized economy has become the major area of employment creation.

Low capability of the unorganized economy to absorb ITI graduates

Micro enterprises showed no large capability for attracting ITI graduates as well as graduate apprentices. Many micro enterprises are unable to afford paying reasonable wages as well as offering attractive conditions of work to certified crafts people. They continue to provide skills training to the low-educated job entrants through long-term on-the-job training. However, ITIs would also be able to train the less educated for whom the unorganized economy jobs are acceptable.

Low private returns to investment in training

Long-term NCVT courses last, depending on the trade, for one to two years and end with a qualification of semi-skilled worker. Industrial enterprises accept training graduates only as apprentices for, mostly, two years’ duration. Some companies also keep them on probation for a substantial period of time afterwards. As a result, personal investment in training, up to four to six years, is required to reach the level of skilled worker. As this is accompanied by a considerable amount of foregone income and uncertain employment prospects, formal skills training in India is viewed as cost-inefficient and an unattractive venture for young people. It raises the issue of closer integration of ITI-based training and apprenticeship as there is an apparent overlap affecting, negatively, rates of return to investment in training.

The problem of equity in distribution of publicly funded training

Admission to public ITIs in India is regulated through a combination of merit-based enrolment (linked to applicants’ school marks) with reservation of training seats for people from disadvantaged families (specifically, from scheduled castes and scheduled tribes) as well as for girls. As a result of the above policies, however justified, only about one-half of the overall publicly funded training seats become available for common applicants. Given the stagnating or diminishing public training provision, the number of free-of-charge training seats is becoming less than the number of eligible applicants. As a result, a relatively small and diminishing number of young people become beneficiaries of publicly funded training, while an increasing number of educated young people have to pay fees to private institutes. Moreover, public ITIs increasingly offer fee-financed short courses to people with low educational levels, likely from poorer families, which results in further inequality.

2.3.2. Operational efficiency and accountability of ITIs

Insufficient internal efficiency of ITIs

This study has identified that many ITIs operate with insufficient levels of:

– internal efficiency viewed as the students’ retention and graduation rates for some trades resulting in an insufficient share of sanctioned training places that eventually produce graduates;

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– utilization of staff, assets and premises of ITIs, particularly felt in conditions of diminishing enrolments.

The actual training capacity of ITIs in terms of premises and available training equipment was found to be much larger than the number of sanctioned training seats, which means it remains underutilized. As ITI training facilities appear to be underutilized, their internal/external efficiency has declined.

Low external efficiency of ITIs

The external efficiency of ITIs was particularly low as the skills training provided was unable to equip young people with high employability. This is reflected by a rather low percentage of graduates who were able to find jobs, enter self-employment or join the family business, being for public ITIs in the three states in the range of 23-41 per cent. The major reasons for low external efficiency are: (a) low demand from organized industry for ITI graduates; (b) financial, management and operational inflexibility of ITIs and lack of incentives for them to deliver courses that more accurately reflect a potential demand for graduates. Although some of these reasons remain beyond the control of the training system, the capability of ITIs to improve their external efficiency can be strengthened significantly.

Utilization of skills by graduates

Around 65-68 per cent of public training graduates reported that they had worked in the trades in which they had been trained or in closely related trades. This does not, of course, mean that they were in employment or self-employment in such trades at the time of the study. As far as skills utilization is concerned, in Maharashtra, private ITC graduates were as successful as public graduates, while in Andhra Pradesh, private graduates’ capability to make use of their skills was much lower.

Main activities of unemployed graduates

Lack of employment opportunities pushed graduates towards further education and training. On average, some 40 per cent of the unemployed public graduates were found in various forms of education and training. Private graduates’ participation in further education and training varied considerably across states, being between 13 per cent in Andhra Pradesh and 32 per cent in Maharashtra. Around half of all the unemployed public graduates were mostly involved in domestic work.

Private training graduates were, on average, less likely to be found in apprenticeship raising the issue of equality of access of public and private graduates to apprenticeship seats. The share of unemployed private graduates found in domestic work was considerably higher, being 57 per cent in Maharashtra and around 80 per cent in Andhra Pradesh. These data may suggest that the quality of private training is, on average, noticeably lower than in public training institutes.

Low operational flexibility, funding and responsiveness of public ITIs

The training system did not develop the capability to flexibly introduce new training courses leading graduates to better employment and self-employment. Although certain areas of rapid growth, particularly in the services sector, have been identified, ITIs continue to offer the same mix of training courses over years which has resulted in the saturation of local labour markets.

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The principal efficiency problem has much to do with the legal and management arrangements that determine operations, funding and staffing of ITIs. The current positioning of ITIs as part of government with the staff being civil servants, capital assets and recurrent budget being part of the government budget, etc., are the major obstacles to improvement of ITIs’ internal and external efficiency.

Employment status and incentives to improve efficiency

The current employment status of staff contributes to the low staffing flexibility of ITIs. Government recruitment and transfer procedures are said to have made it, in many cases, almost impossible to introduce new courses as this would require long lead times for replacing instructors.

As ITIs operate in a centrally prescribed mode, their staff lack freedom to operate flexibly in local training markets. The demand for high-quality and relevant training has increased while ITIs failed to respond to it. Staff of public ITIs have only few incentives and limited freedom to expand the number of sanctioned training seats, fill all the available training capacity, replace training courses with new ones, and ensure that a greater share of students would appear for trade tests and actually pass.

The important drawbacks identified by this study, such as ITIs’ routine offering of trades that are known for limited employability, suggest that the problem of efficiency cannot be resolved without management reform. This reform should eliminate financial, administrative, and other constraints and improve motivation of ITI staff to operate efficiently.

There is already a shared understanding by all three examined state training systems that ITIs need greater operational autonomy to ensure more flexibility and responsiveness to the market demand for skills. 13 In Orissa, for instance, certain attempts have been made to proclaim individual ITIs as autonomous institutions. In Maharashtra, the process of enhancing freedom of ITIs has been more advanced and involved considerable preparatory work (for discussion of this experience, see section 2.1.3).

Financing of ITIs

The funding levels of public institutes remain low which constitutes a problem for their growth and improvement. This refers to both capital and recurrent funding. Annex 17 suggests that in some states, the budget allocation to ITIs for training materials is only INR25-30 per student/month which makes it impossible to deliver any reasonably sound workshop activities. Low levels of funding also constrain practical visits to companies, skills upgrading of instructors, maintenance of buildings and equipment. In certain cases, although the training syllabus has been revised, due to shortage of funding, instructors have not been retrained.

In the institutions surveyed, a number of units of old training equipment was found. 14 Such equipment occupies useful space and prevents its efficient utilization. Principals quoted extremely cumbersome procedures for writing off old equipment, as if it were to be auctioned. The majority of public institutions undertook no maintenance of their training

13 See, for instance: National policy on vocational training, Draft, DGE&T, MOL, GOI, New Delhi, 2002.

14 For instance, in the ITI Talcher, Orissa, some ten units of machinery, completely out of order and dating back to 1966, were found.

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equipment for a long period of time. In general, there is no budget line for building and equipment maintenance.

The government budgeting and financing system sends the wrong signals to ITIs. It does not differentiate between the institutes that do, or do not, maintain high internal and external efficiency. It provides guaranteed funding per institution and staff assigned to it. In practice, it is possible to have an ITI with many staff and only few students. The same rates of funding had been allocated to poorly performing courses and institutions where a considerable number of students dropped out, as well as to those that maintained high quality of instruction.

Lack of accountability

State governments do not hold ITIs accountable for their performance and particularly outputs. Data on numbers of graduates trade-wise were not available in any of the states reviewed. Also, it is not a requirement for ITIs to monitor their graduates and report on their labour market success. This means ITIs are not accountable for their performance and outputs and eliminates the very basis against which their performance can be measured and improved.

Promising responses to the problem of low internal efficiency

The problem of diminishing efficiency was recognized and some state governments as well as individual training institutes, particularly in Maharashtra, developed responses to this problem. Such responses have so far involved:

(a) more rapid closing of the unpopular vocational courses and introducing new ones; this has resulted in improvements of enrolments and better responsiveness to the demand for skilled workers;

(b) introduction of the fee-financed short courses ranging from several days to weeks and months and aimed at students with various educational levels.

Several promising reforms have recently been tested in the State of Maharashtra that aim at improving internal efficiency of public ITIs through giving them greater freedom and providing rules for implementing income-generating activities and training-cum-production schemes. Initial evidence suggests that such activities have been well received by ITI staff and impacted on better utilization of institutions’ capital assets. These schemes encouraged staff to assess their assets, labour costs, capital and its depreciation and to improve their utilization. A large percentage of revenues is supposed to be reinvested in improving capital assets, modernizing long and short-term-courses. This has also resulted in better utilization of training seats and more careful selection of programmes.

Different models of revenue generation have emerged. For instance, In Orissa, the revenues earned by ITI’s are said to be shared with the state government on a 50-50 per cent basis. In Maharashtra, a certain share of the revenue earned is also remitted to State Directorate.

2.3.3. Training supply management

Imbalance in supply of graduates

State Directorates have not developed clear practices for identifying potential demand for skills. As a result, the supply-demand ratios for a number of trades have far and away exceeded reasonable levels. For some trades, such as electrician, fitter, etc., the annual

Gasskov.doc 41

outputs of graduates in some states are almost equal to the numbers of people employed in these trades. This obviously increases the risk of graduate unemployment. Some states also allowed for uncontrolled growth of enrolments at private ITCs that contributed considerably to the supply-demand mismatches. There is a clear overlap in the types of courses offered by public ITIs and private ITCs. The quality of ITC training has also been referred to as a problem that the State Directorates are sometimes unable to contain as numbers of private institutes are very large.

Lack of focus on skills training for the unorganized economy

No data was found in the State Directorates regarding the occupational structures of the unorganized economy and the type of skills this sector may demand. There is no strong commitment and interest to tap such a demand although a number of ITIs have started offering short courses for low-literate youth. Many ITIs with large numbers of drop-outs have shown no intention to improve utilization of their assets and resources through developing flexible fee-financed courses for the unorganized sector.

Lack of involvement of district authorities

District authorities remain mostly uninvolved in employment promotion and skills development activities associated with establishment and operation of ITIs. As ITIs remain unaccountable before the district administration, their training courses take no account of the realities of the local labour markets.

Absence of industry participation

Industry has not been encouraged so far to play any role in vocational training. No industry participation is found in defining the state training policies, programming of courses and enrolments. Some rare cases of industry participation as members of ITI Management Committees suggest that the linkages between state training systems and industry have not been able to benefit both. Industrial associations that integrate small and micro-enterprises of the unorganized economy are not invited to be partners of the state training systems.

Need for a new mix of courses

The study has identified that:

(a) a majority of ITI courses are in basic industrial trades, while expansion of the job market will mostly be in the services and other sectors for which relevant and nationally recognized trades are limited;

(b) because of the specific orientation towards basic industrial trades, the training equipment installed in ITIs is mostly heavy, space consuming and can be used only for training in one trade (such as turning laths). This practice does not allow for course flexibility and needs to be reviewed.

There is an apparent reluctance at the State Directorates to encourage ITIs to offer courses in non-traditional trades such as commerce, insurance, personal services, etc. It is widely believed that ITIs have no mandate to offer such courses and that they are to be delivered by colleges and other institutions reporting to the HRD Ministry. On the other hand, given the considerable market saturation with graduates trained in basic industrial trades, offering non-traditional courses may be one of the few important strategic options allowing improvement in the operational efficiency of ITIs.

42 Gasskov.doc

2.3.4. National vocational qualifications

Narrow and inflexible national vocational qualifications

The range of the NCVT national vocational qualifications is very limited and does not reflect realities of the growing and diversifying Indian economy. National qualifications consist mostly of basic industrial trades while major employment growth is expected in the areas of services, agro processing, commerce, etc. The number of NCVT trades (some 70) as compared to the number of vocational qualifications in Australia (around 1,500) clearly shows that they are too general to reflect growing specialization in the trade areas.

Absence of recognized levels of attainment

A considerable problem is that national qualifications do not have levels of attainment. The only difference between NCVT certificates is that ITIs’ graduates are certified as semi-skilled workers, while graduate apprentices are certified as skilled workers. As a result, crafts people cannot obtain any evidence of their levels of acquired competence. For instance, a person may be employed as a skilled welder at the beginning of his/her career and retire as a skilled welder after many years of service. This type of vocational qualification denies the idea of lifelong learning and provides no incentives for acquiring further knowledge and skills. The companies interviewed by the team do recognize this problem and some have introduced their own levels of skills identification.

The firms with a majority of jobs in the high skills categories apply grades for each occupation that reflect the achieved levels of knowledge and experience. No common policies have been found across industry regarding such grading. 15 Such grades are, however, not purely skill-related but also reflect some other promotional factors. No written descriptions of the differences between grades are available. Moreover, companies do not issue written statements that would reflect acquired grades of proficiency by their workers. That makes the skilled workers, who were to transfer or become retrenched, vulnerable as they cannot prove their experience, both in India and overseas. Skills and experience acquired in one firm usually have no recognition in other firms. The problem is that, in India, there are no recognized skills standards as well as levels of occupational proficiency.

Insufficient academic freedom

The current NCVT rules do not permit the State Directorates of Vocational Training to tune the NCVT national training curriculum to local industry needs. The Directorates as well as ITIs also complained that NCVT courses are too long and over regulated which affects their operational efficiency.

15 For instance, Nava Bharat Ferro Alloys Ltd. applies five grades, while Orissa Polyfibres applies seven grades and the National Thermic Power Corporation (NTPC) applies 11 grades.

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Section 3. The agenda for reform

R1. Respond to policy challenges

The national training policy should be reviewed in order to recognize that:

(a) there is an apparent decline in demand for long-term NCVT courses in basic industrial trades, and that ITIs need to be reoriented towards modern industrial as well as non-industrial programmes aiming at commerce, finance, personal services, agro processing and other sectors that were identified as having major potential for job creation;

(b) there is an urgent need to address skills development needs of the unorganized economy as well as of low-literate, mainly rural, youth while a considerable capacity of the public training system remains underutilized;

(c) principles of distribution of publicly funded training need to be reviewed with the aim to establish fairer access of young people to such training. The team suggests that reasonable fees (amounting to some 20-30 per cent of the training unit cost) should be introduced for all students of public ITIs, except those who are the recognized poor;

(d) there is a need to review and integrate ITI-based training with formal apprenticeship in order to reduce overall learning periods and improve returns to investment in skills training and its attractiveness to young people.

R2. Provide greater autonomy to ITIs and introduce the accountability framework

R2.1. Expand scope of autonomy

If state governments cannot provide more financial resources to the ITIs, then they should offer operational freedom and incentives enabling staff to improve utilization of existing assets and generate revenues. Devolution of powers would result in both, an increased workload for ITI staff as well as incentives. The regime of autonomy, which brings no obvious incentives to the staff, has a great chance of being rejected or underutilized.

International experiences suggest that conversion of training institutions into flexible and autonomous operators requires considerable reform of management, financing and staffing rules and regulations. The states that attempt to improve autonomy and flexibility of their ITIs would need project-based assistance to implement systematic reform rather than doing “patchwork”.

The suggested autonomy of ITIs would include:

– freedom to decide on a realistic mix of training programmes to offer as well as on enrolments;

– freedom for the ITI management to hire and fire teaching and non-teaching staff. It may be suggested that at the beginning of the reform, the existing vacancies should no longer be filled through government appointments but rather through contract-based employment. One possibility is that staffing of ITIs be made as a mix of permanent staff and contractual staff (let’s say, a 50/50 per cent rule). Recruitment rules for the

44 Gasskov.doc

contractual staff should be firmly established and salary scales should be fixed and decent. Contract staff will have an incentive to become permanent provided that there are vacancies;

– disassociation from government departments in all operational issues related to the payment of expenditures such as electricity, water, building maintenance, etc. ITIs should be able to finance these costs themselves from revenues received from the Government, as well as student fees, etc.;

– freedom to generate revenue by all legal means and spend it according to certain rules that are approved by the State Treasury. This would firstly require that ITIs open bank accounts. They should also have the right to conclude service agreements with customers and receive fees. The policy regarding ITI revenues should make it clear that they are exempt from taxation.

R2.2. Reform management structures

ITI management should be strengthened through introduction or reconstitution of their Management (Governing) Boards. Boards are to be given rights to employ and fire staff including the ITI principal, to budget and disburse important funding and make strategic development decisions.

The tripartite management boards should be appointed by the state governments. Such boards would have the right to enter into service contracts with the state government or other financing agencies that determine the type and amount of services the training institute would deliver in exchange for specified funding.

Given the complexity of autonomous operations, ITI management and accounting staff should be retrained. They should acquire management, technical, operational and other skills in order to maintain the mix of their programmes in high gear with the demand for them, to market their courses, and to manage their accounts. The DGE&T may wish to draft standard operational rules for the management boards.

R2.3. Establish new relations between state governments and ITIs

The role of the State Directorates of Technical Education and Industrial Training would shift from direct administration of public ITIs towards policy guidance, planning and programming of training supply in the state and its districts, as well as training in quality assurance. To maintain reasonable demand and supply ratios, all public and private ITIs should be required to conduct student tracer studies annually and report on findings to the state directorate. The State Directorate should examine emerging imbalances between the existing demand for graduates and their supply in major trades and insist in their service agreements with ITIs that they should reduce the identified imbalances.

The State Directorates would have a new operational role to play in appointing ITI management boards and concluding service agreements with each individual ITI. A service agreement will determine the type and amount of training services that an ITI should deliver in exchange for a specified amount of government funding. The State Directorates will implement their training and employment promotion policies through changing service agreements and supervising their implementation. ITIs that do not comply with requirements of the state-funded service agreements will see their revenues reduced.

Gasskov.doc 45

Need for transparent accountability

Introduction of autonomy and demand for greater efficiency should be accompanied by the new accountability framework. ITI management boards will be required to evaluate their performance and report to the state government against established performance and efficiency indicators. Some of these indicators are to be routinely reported on quarterly before the new financial transfer is effected by Government to each ITI. A broader range of indicators involving, for instance, employment status of graduates is to be reported on once a year. DGE&T may wish to develop the accountability framework, making it uniform for the country.

R3. Reform the ITI funding mechanism

R3.1. Introduce enrolment-based funding

There is a need to introduce the enrolment-based funding mechanism that would allocate funding per (running) student. Moreover, different courses assume different costs and should be funded according to different rates. The funding allocation should be reviewed quarterly on the basis of reports produced by appointed ITI auditors. If some students dropped out of the programme, funding of this ITI should be reduced to reflect the smaller number of (running) students. A financing model should undergo considerable change allowing improvement in cost-efficiency of public expenditure.

The principal prerequisite of financial autonomy is introduction of ITI bank accounts. The current situation, where no accounts exist in many states, is a major disincentive for ITIs to enter into income-generating activities and improve their cost-efficiency. There should also be certain common regulations regarding the use of revenues. ITI revenues should be treated by the State Treasury as non-taxable; for this to happen, a government resolution should be issued. Auditors for ITI performance and accounts should be appointed.

R3.2. Encourage income-generating opportunities

As state governments seem to continue maintaining current low funding levels, ITIs should be encouraged to generate revenues through offering training and other services in the market. Given the difficult situation with equipment, buildings, courses and training materials, it is only the expansion of private funding that can improve ITI conditions and ensure healthy growth. Income-generating activities can only become realistic if ITIs are provided with necessary levels of operational autonomy in all possible areas.

ITIs should be allowed to introduce student fees within the limits regulated by state governments or the DGE&T. Given their solid reputation and better instructors and equipment, it is most likely that they would receive a considerable number of student applicants for the fee-paid courses. They should also be encouraged to develop some training-cum-production activities.

Entering into income-generating activities would require a completely new accounting culture in ITIs. They should introduce the accounting rules applied in the private sector as well as professional accountants. This means that training and other equipment installed in ITIs should be treated as having the amortization life while the process of costing training and production services should involve amortization charges for equipment and buildings. Revenues should be used to cover operational costs plus financing maintenance and replacement of the amortized equipment and buildings. This would help to avoid unfair competition with proprietary training institutions and to

46 Gasskov.doc

establish the amortization funds that will finance replacement of equipment and repair of buildings.

R3.3. Upgrade ITI capital assets

To ensure a smooth transfer of selected ITIs to operational autonomy, their potential for improving operational efficiency should be strengthened. For selected ITIs, an overhaul of buildings and equipment should be conducted with the aim to write off the non-functional equipment and to free space for new programmes and increased enrolments. Also, lights, wiring, and internal walls should be reviewed enabling improvement in space utilization and working conditions. Since the rules for writing off non-functional equipment are extremely cumbersome, they should be reviewed by competent authorities. ITIs, planned to become autonomous, should receive some government resources to upgrade their training equipment.

R4. Improve training supply management

R4.1. Adjust training provision to employment growth forecasts

The document “Targeting ten million employment opportunities per year” (Planning Commission, GOI, New Delhi, 2002) proposed the Employment Generation Programme for India. In order to translate this programme into a plan for development of vocational training in India, the economic sectors that are thought to be offering high employment growth should be analysed with a view to describing their future locations and occupational structures. The principal trades identified for the employment growth sectors and numbers of skilled persons needed should be compared with the break-down of current enrolment figures in public ITIs and proprietary ITCs. This would allow a review of planning of training provision.

To address the identified demand-supply imbalances (see section 2), the process of gradual adjustment of training provision to new realities should be initiated as early as possible. The survey instruments used in this study can be utilized for making regular and inexpensive assessments of supply of and demand for training graduates.

District authorities should become involved in management, programming of courses and assessment of ITI operations. They should have the right to appoint representatives to ITI Management Boards.

To considerably improve the capability of State Training Directorates to assure quality of private training provision, an annual maintenance charge should be introduced for private providers. The funds collected would enable the financing of quality assurance systems (as is practiced, for instance, in each Australian state).

R4.2. Address skills needs of low-literate youth

In order to address skills development needs of low-literate youth (particularly rural) on a mass scale, the Skills Development and Employment Promotion Centres (SDEPC) could be set up in the block or district capitals. The SDEPCs would operate as satellite units or campuses of ITIs. They would offer short-term training courses in basic industrial or other trades, as locally required, to people who are mainly capable of joining the unorganized economy.

Gasskov.doc 47

Some of the equipment needed for delivering training in basic trades could be transferred to SDEPCs from ITIs while giving way and space to modern courses to be launched at ITIs, for instance, in services trades. SDEPCs could be funded by student fees as well as by the budgets currently available through various poverty alleviation programmes like SGSY, etc. That is why the participation of district authorities in local skills training and employment promotion will become very important.

There is a need to review the need for maintaining the technically weak ITIs which cannot attract enrolments. One of the approaches can be that smaller and weaker ITIs may be converted into campuses of larger institutions. In addition, more campuses of ITIs can be constructed, particularly with the aim to improve their outreach to rural areas.

R4.3. Support initiatives aimed at improving efficiency

To support and advocate the initiative of the Maharashtra State in improving efficiency of ITIs through reasonable income-generating activities as well as community services centres as the way to promote self-employment of ITI graduates; more states need to be encouraged to practice these activities.

R5. Adopt a strategy for restructuring training provision

To reflect the continuing downsizing of the organized economy and its capability to employ skilled graduates, the team proposes the following action:

(a) reduce enrolments on long-term courses in basic industrial trades such as fitters, electricians, etc. for educated school leavers as long as their graduates continue to experience difficulties of finding employment in the formal economy and do not wish to join the unorganized sector;

(b) introduce long and short training programmes in new industrial trades that should reflect the changing needs of various industrial sectors;

(c) introduce new training programmes in ITIs for educated school leavers (8th Grade and above) in non-industrial trades that correspond to the fast growing sectors such as commerce, insurance, personal care, agriculture-related, forestry and paper, tourism, IT-enabled services, paramedical professions, etc. Although such trades are presently offered by colleges and other educational institutions, ITIs should enter into these trade areas and carefully avoid unnecessary competition for students;

(d) introduce/expand short courses in basic industrial trades for school drop-outs (with certain minimum entry levels, for instance, complete primary education) or for school graduates who are willing to rapidly acquire basic industrial trades but do not want to pursue the National Trade Certificate. As such young people are usually motivated to join the unorganized economy, this would result in the supply of semi-skilled workers and enable the gradual transformation of the outdated unorganized sector.

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R6. Reform the national vocational qualifications framework

R6.1. Introduce new vocational qualifications and training programmes

A fresh effort should be made to catalogue a new range of occupations reflecting the economic sectors that feature high promise of growth. 1 Skills standards for new and current occupations should be developed with strong involvement of industry professionals.

The list of national vocational qualifications should be reviewed to:

– update existing and eliminate obsolete basic industrial trades/qualifications;

– introduce new qualifications particularly those in the areas of personal care, commerce, etc. to reflect demand for new skills taking special account of the interests of women;

– introduce new procedures for developing and updating vocational qualifications.

The training programmes offered by the HRD Ministry should be taken account of in developing new trades and courses. The advanced countries’ vocational qualifications and programmes need to be examined in order to foresee the forthcoming demand for new skills.

R6.2. Address the problem of skills recognition

The NCVT system of national vocational qualifications should attempt to:

– introduce levels/grades for each vocational qualification that would be recognized across industry sectors;

– introduce practices allowing testing and certifying skills of workers that have been acquired through practical experience;

– convert vocational programmes into modular-based ones; this would allow better integration of ITI-based training with apprenticeships.

R7. Implement the training system management project

(Annex 22)

1 India Vision 2020. Planning Commission, Government of India, New Delhi (2003).

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Annex 1

Questionnaire for survey of industrial training institute

May 2003

Evaluation of the Industrial Training Institutes of India

Ministry of Labour, Government of India and the International Labour Organization are carrying out an evaluation of Industrial Training Institutes in several states of the country. This evaluation will examine the efficiency of your ITI in producing a workforce according to the market demand for skills. It will also survey opinions of graduates regarding the quality and relevance of training received.

State___________________

Type of the ITI: Public_______1 Private_____2

Name of the ITI______________________

Street address_________________________________ Telephone _________

Name of the principal_____________________________

Table 1. List all training courses in which students enrolled in the year 1999 in your institute and produce data per course as requested below:

Training course/trade Number of sanctioned training places per course

Number of students enrolled in each course at its beginning

Number of students who appeared for a trade test

Number of students who passed the final trade test

50 Gasskov.doc

Table 2. List all training courses in which students enrolled in the year 2000 and produce data per course as requested below:

Training course/trade Number of sanctioned training places per course

Number of students enrolled in each course at its beginning

Number of students who appeared for an exam

Number of students who passed the final trade test

Table 3. Staff utilization (use running figures)

Indicators

1. Total number of full-time students

2. Staffing figures and vacancies: 2.1. Total number of teaching staff in your ITI: – full-time – part-time

2.2. Total number of non-teaching staff: – full-time – part-time

2.3. Current vacancies (not occupied by full-time or part-time staff): – ITI principal vacant – teaching staff vacancies – non-teaching staff vacancies

Date/signature of the principal: _______________________

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Annex 2

Questionnaire for survey of ITI graduates

Evaluation of the Industrial Training Institutes of India

Ministry of Labour, Government of India and the International Labour Organization are carrying out an evaluation of Industrial Training Institutes in several states of the country. This evaluation will examine outputs and the efficiency of your ITI in producing a workforce according to the market demand for skills. It will also survey opinions of graduates regarding the quality and relevance of the training received.

Type of the ITI: Public_______1 Private_____2

Name/Location of the ITI__________________________ State_________________

The graduate’s personal data (to be filled in by the ITI Principal):

1. Respondent number ___________

2. Name of graduate _____________________

3. Male ____1 Female_____2

4. Address _____________________________________

5. Telephone number _______

Q1: The trade acquired and the course accomplished in the ITI

The trade that you acquired in the ITI

Year of your enrolment(1999 or 2000)

Course duration (months)

Q2: Are your currently doing some work or looking for work? (tick only one box)

I have wage employment

I am self-employed or

employer

I am assisting my parents in

their job/business

I am doing mostly

domestic work

I am not working and I am looking for employment or

self-employment

I am not working and I

am not looking for

work

(a) (b) (c) (d) (e) (f)

Q3: If you continue education and training, kindly specify (tick only one box)

Polytechnic Apprenticeship If some other type of education, indicate

below

If some other type of skills training, indicate

below

(a) (b) (c) (d)

52 Gasskov.doc

Q4: After graduation, did you ever work in the trade in which you were trained in the ITI? (tick only one box)

Yes, I did work in the trade in which I was

trained

I worked in a different trade which, however,

allowed me to use skills acquired in the ITI

I worked in a different trade to which my

training in the ITI was only of little use

In doing my work, training in the ITI did

not help me at all

(a) (b) (c) (d)

Q5: What is your opinion about suitability and employment potential of the trade that you acquired in the ITI? (tick only one box)

It is a very good trade The trade is reasonably good

It is not a very suitable trade

This trade is not useful at all

(a) (b) (c) (d)

Q6: What is your opinion about the quality of training received in ITI? (tick only one box)

Training quality was excellent

Training was of good quality

Quality of training was not very good

Training quality was poor

(a) (b) (c) (d)

Q7: If you feel that training in the ITI should be improved, please identify the areas that need improvements (tick any appropriate lines)

Areas where improvement of training is needed Tick

1. Theory of technology

2. Use of computers

3. Use of tools

4. Use of machines

5. Use of drawings

6. Use of written instructions

7. Theory and practice of equipment maintenance

8. Communication and team work practices

9. Knowledge of labour law and industrial relations

10. Safer working practices

11. Discipline and accuracy

12. Other (specify)

Q8: If the graduate planned for an interview has moved to some other place, find out from parents/neighbors the following information:

(a) The graduate’s location: same State but other District ____ / other State _____

(b) Fill in questions on the graduate’s current employment/education status

Date/signature of the interviewed graduate _________________________

Name/signature of the interviewer ____________________________________

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Annex 3

Questionnaire for survey of enterprises

Ministry of Labour, Government of India and the International Labour Organization are carrying out an evaluation of Industrial Training Institutes in several states of the country. Part of this evaluation will examine the role of Industrial Training Institutes in supplying skilled workforce to industry.

The information that is collected will be held confidential, and in particular the names of those enterprises surveyed will not be included as part of the data and will not be reported in any form.

State__________________

Name of the enterprise_________________

Street address____________________________ Telephone_________

Name of CEO____________________________

Q1: Sector activity of your enterprise: (please tick one)

Agro-processing ____

Manufacturing ____

Wholesale retail and trade ____

Construction ____

Hotels and restaurants ____

Transport, storage and communication ____

Other ____

Q2: Provide data on employees of your enterprise:

Average number of employees (permanent and contract workers)

Number of skilled workers (permanent and

contract workers)

Total number of skilled workers employed in

the last 3 years

Number of ITI graduates employed in

the last 3 years

Q3: List below (or attach the list) the names of all your employees who have been trained in Public or Private Industrial Training Institutes (ITIs)

N Name Trade ITI: Public/ Private

Year of graduation

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

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Q4: List below (or attach a list) the names of all your employees who have been trained as certified apprentices without being trained in ITIs

N Name Trade Year of graduation

1.

2.

3.

4.

5.

6.

7.

8.

9.

Q5: As an employer, how satisfied are you with the quality of training received by your employees in Industrial Training Institutes (ITI)? (Please tick appropriate boxes.)

Level of satisfaction/ institution

Highly satisfied

Satisfied Dissatisfied Highly dissatisfied

No experience with these graduates

Public ITI

Private ITI

Q6: If you employ graduates of Industrial Training Institutes (ITI), what knowledge and skills do they usually lack? (Tick any number of lines.)

N Type of knowledge and skills that graduates lack Tick

1. – Theory of technology

2. – Use of computers

3. – Use of tools

4. – Practical use of machines

5. – Use of drawings

6. – Use of written instructions

7. – Theory of equipment maintenance

8. – Communication and team work practices

9. – Knowledge of labour law and industrial relations

10. – Safer working practices

11. – Discipline and accuracy

12. – Other (specify)

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Q7: Has your company ever experienced problems finding employees with the skills that you need?

(a) Never __________

(b) Occasionally __________

(c) Frequently __________

Q8: At what level are these skills shortages (if any) most severe?

(a) Semi-skilled __________

(b) Skilled worker __________

(c) Technician/engineer __________

(d) Supervisory/management __________

Q9: In which trade areas do you experience major skills shortages?

(a)________ (b)____________ (c)____________(d)____________

Thank you very much for completing this questionnaire. Your responses will lead to future improvements in skills training at ITIs.

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Annex 4

Evaluation coverage in the three states of India

Entry Orissa (Bhubaneshwar, Cuttack and Angul Districts)

Andhra Pradesh (Hyderabad, Mahabubnagar, Medak, Nalgonda, and Rangareddy Districts)

Maharashtra (Mumbai, Thane, and Pune Dustricts)

1. Total number of public ITIs/sample of this study

27/10 90/18 347/37

2. Number of students covered by the internal efficiency evaluation in public ITIs

4 190 4 100 9 600

3. Total number of private ITCs/sample of this study

131/12 500/15 260/18

4. Number of students covered by the internal efficiency evaluation in private ITCs

1 430 2 730 2 500

5. Numbers of ITI graduates covered by tracer study

1 760 940 5 810

6. Numbers of ITC graduates covered by tracer study

375 90 2 180

7. Number of enterprises surveyed 16 12 43

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Annex 5

Internal efficiency of training institutes, Orissa (Sample: 4,190 public and 1,430 private students)

% of sanctioned training places filled at enrolment

Student retention rates

Student graduation rates

% of training places that produce graduates

Public ITI

Private ITC

Public ITI

Private ITC

Public ITI

Private ITC

Public ITI

Private ITC

1. Welder 102.7 62.5 86.8 100.0 85.2 92.7 77.3 59.4

2. Mechanic (Diesel) 107.0 95.8 85.1 86.8

3. Plumber 104.7 90.8 85.2 81.3

4. Mechanic (tractor) 101.1 80.6 87.0 71.9

5. Sheet metal worker 112.5 66.8 91.2 68.8

6. Pump operator (mechanic) 107.5 70.2 89.1 67.5

7. Computer operator and PA 93.8 86.7 92.3 75.0

8. Wireman 101.8 80.3 97.9 80.0

9. Mechanic (motor vehicle) 101.6 78.3 88.0 70.7

10. Fitter 100.4 109.3 88.1 96.6 96.0 92.5 90.3 96.5

11. Turner 102.6 81.4 71.2 60.3

12. Machinist 102.5 91.6 75.2 72.9

13. Electrician 106.0 110.2 84.3 96.0 96.8 97.1 90.0 101.2

14. Draughtsman (mechanical) 107.0 64.5 87.3 59.0

15. Draughtsman (civil) 102.5 82.5 96.9 81.3

16. Electronic mechanic 104.3 71.5 97.9 73.1

17. Cutting and sewing 84.4 121.9 90.3 86.9 96.0 100.0 71.9 106.3

18. Stenography 95.7 66.3 70.7 49.9

Averages for the sample 102.1 101.0 80.9 94.9 88.3 95.6 73.8 90.9

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Annex 6

Internal efficiency of training institutes, Andhra Pradesh (Sample: 4,100 public and 2,730 private students)





Public IT

Private ITC

Public ITI

Private ITC

Public ITI

Private ITC

Public ITI

Private ITC

1. Welder 80.3 69.4 50.0 28.0

2. Fitter 77.9 75.4 72.1 72.1 62.7 51.6 30.5 33.0

3. Electrician 82.3 94.7 76.4 89.7 44.0 66.6 26.3 58.0

4. Mechanic (Diesel) 86.4 95.2 79.2 88.3 47.8 68.5 34.6 58.1

5. Carpenter 75.0 53.7 33.8 14.1

6. COPA 50.0 72.4 85.7 27.3


8. Turner 73.2 65.0 66.8 93.3 62.8 79.1 29.0 49.4

9. Machinist (composite) 82.4 64.3 63.6 32.4

10. Mechanic (radio and TV) 78.1 69.1 56.3 26.6

11. Mechanic (refrig. and AC) 79.2 57.8 66.5 35.7

12. Draughtsman (civil) 75.3 65.7 67.1 36.1

13. Electronic Mechanic 78.6 86.1 67.0 80.5 78.8 47.7 39.4 30.1

14. Cutting and sewing 69.4 76.4 83.9 39.8

15. Stenography (English) 83.1 70.5 69.5 37.9

Averages for the samples 77.4 83.3 68.3 84.8 62.9 62.7 31.8 45.7

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Annex 7

Internal efficiency of training institutes, Maharashtra (Sample: 9,600 public and 2,500 private students)





Public ITI

Private ITC

Public ITI

Private ITC

PublicITI

Private ITC

PublicITI

Private ITC

1. Welder 93.1 78.8 91.1 92.5 87.6 86.4 78.8 62.8

2. Fitter 94.3 92.3 87.6 86.1 84.9 84.0 71.7 69.0

3. Electrician 93.0 107.7 91.1 90.3 73.8 77.4 63.2 74.4

4. Mechanic (Diesel) 102.9 103.2 94.5 93.1 67.7 80.7 66.8 76.6

5. Carpenter 79.3 94.0 84.0 61.5

6. COPA 100.3 93.4 94.5 88.2


8. Turner 88.7 90.8 81.3 91.3 65.4 77.7 46.0 67.5

9. Machinist (composite) 92.3 97.9 81.1 95.1 65.9 66.8 45.7 65.1

10. Mechanic (radio and TV) 85.4 76.2 69.4 45.7

11. Mechanic (refrig. and AC) 98.4 99.4 83.7 87.7 85.8 89.6 70.5 76.7

Draughtsman (civil) 94.0 79.4 77.7 56.9

13. Draughtsman (Mechanical) 88.2 84.4 75.6 78.0 76.8 81.7 53.5 65.8

14. Electronic mechanic 91.8 90.6 85.2 83.0 82.5 75.0 64.8 59.1

15. Foundryman 88.3 85.9 68.0 54.3

16. Plumber 96.2 86.3 80.4 66.8

17. Mason 88.3 84.1 53.6 42.6

18. Sheet metal operator 95.9 91.4 76.8 71.1

19. Wireman 97.2 64.5 85.2 92.7 77.9 74.5 67.4 44.1

20. Cutting and aewing 87.4 83.6 92.6 69.1

Average for the samples 92.2 91.0 85.6 89.0 77.5 79.4 62.6 61.1

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Annex 8

Proportion of ITI graduates in the workforce of industrial enterprises 1

Industries Number of employees in a sample

Number of skilled workers

Per cent of ITI graduates in all workforce

Per cent of ITI graduates among skilled workers

ORISSA

Steel processing 280 n.a 2.8 n.a

Aluminium processing 4 000 n.a 37.5 n.a

General manufacturing 800 n.a 3.5 n.a

Food and drink industry 184 n.a 3.3 n.a

Agricultural engineering 140 n.a 14.7 n.a

Synthetic fibre 580 150 23.5 90.7

Power generation 1 360 n.a 21.9 n.a

Ferro plant 290 55 10.3 54.5

Transport, storage and communication 2 760 1 800 4.7 7.2

ANDHRA PRADESH

Electronics 4 600 410 5.9 6.6

Biotechnology 440 280 10.2 16.0

Manufacturing 1 320 1 036 4.2 5.3

Health, retail and hotel industries 940 637 7.8 7.8

MAHARASHTRA

Manufacturing electrical 1 750 1 210 27.0 29.3

Manufacturing chemical 6 180 1 740 2.4 8.5

Rubber industry 450 330 n.a n.a

Electrical appliances 3 320 3 148 10.4 11.0

Printing and publishing 400 326 3.7 4.6

Civil engineering 3 710 1 858 50.1 n.a

Chemical industry 430 210 6.7 13.7

Automobile assembly 2 340 2 010 n.a n.a

Other manufacturing 2 700 1 480 14.1 25.6

1 All numbers include both permanent and contract workers.

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Annex 9

Occupational structure of the organized economy and supply of graduates in Orissa (two districts, selected trades, 2002) 1

Trades No. of jobs in each trade

Graduations from public ITI

Graduations from private ITCs

Supply-demand ratios trade-wise

Welder 870 212 277 0.56

Mechanic (Diesel) 355 59 41 0.28

Wireman 930 164 9 0.19

Mechanic (motor vehicle) 1 800 134 68 0.11

Fitter 3 560 249 2493 0.77

Turner 660 86 12 0.15

Machinist 497 89 21 0.22

Electrician 3 450 251 1 847 0.61

Mechanic (refrigeration and A/C)

240 50 17 0.28

Electronic mechanic 931 230 228 0.49

Source: State Directorate, Orissa.

1 Supply-demand ratios are calculated by dividing the numbers of graduates in each trade by the number of jobs identified in that trade in the organized economy enterprises. Numbers of graduates are calculated on the basis of course enrolments and adjusted to the internal efficiency indicators calculated for each trade (see Annex 5).

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Annex 10

Occupational structure of the organized economy and supply of graduates in Andhra Pradesh (five districts, selected trades, 2002) 1

Trades No. of jobs in each trade in the formal economy



Supply-demand ratios trade-wise

Carpenter 240 6 – 0.03

Draughtsman (civil) 285 36 274 1.10

Electrician 10 318 151 3 292 0.33

Electronics mechanic 2 980 94 520 0.21

Fitter 11 890 207 1 680 0.16

Machinist 1 150 59 27 0.07

Mechanic (Diesel) 1 745 78 1 430 0.86

Motor mechanic 1 547 117 73 0.12

Refrigeration and AC 465 40 46 0.18

Sheet metal worker 395 5 – 0.01

Turner 1 946 85 69 0.08

Welder 1 470 57 100 0.11

Source: State Directorate, Andhra Pradesh.

1 Numbers of graduates are calculated on the basis of course enrolments and adjusted to the internal efficiency indicators calculated for each trade (see Annex 6).

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Annex 11

Occupational structure of the organized economy and supply of graduates in Maharashtra (three districts, selected trades, 2002) 1

Trades Number of jobs in each trade



Total enrolments

Supply-demand ratio trade-wise

Welder 4 020 457 377 834 0.21

Mechanic (Diesel) 3 005 180 147 327 0.11

Wireman 2 023 300 120 420 0.21

Mechanic (motor vehicle)

8 036 285 423 708 0.09

Fitter 13 489 724 1 005 1 729 0.13

Turner 5 089 207 329 536 0.11

Machinist 4 130 160 94 254 0.06

Electrician 6 622 436 655 1 091 0.16

Mechanic refrigeration and A/C

2 125 260 221 481 0.22

Electronic mechanic 5 355 330 227 557 0.10

Source: State Directorate, Maharashtra

1 Numbers of graduates for the ratios are calculated on the basis of course enrolments and adjusted to the internal efficiency indicators calculated for each trade (see Annex 7).

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Annex 12

Employment status of graduates, trade-wise, Maharashtra

Trades Wage employment (%)

Self-employed or employed (%)

Assisting parents in doing their job/business (%)

Not working and looking for a job (%)

Not working and not looking for a job (%)

Welder 31.2 12.0 8.0 42.1 6.7

Mechanic (Diesel) 32.2 10.5 12.8 39.9 4.6

Mechanic (motor vehicle) 35.4 6.0 7.2 48.9 2.5

Fitter 26.2 6.9 6.5 56.9 3.5

Turner 31.9 8.8 11.1 41.2 7.0

Electrician 24.4 14.9 5.5 52.3 2.9

Refrigeration and A/C mechanic 35.6 10.9 5.4 46.0 2.1

Electronic/mechanic 27.1 14.0 3.8 50.8 4.3

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Annex 13

Employer assessment of skills shortages of graduates of public ITIs

Type of knowledge and skills that graduates lack Orissa Andhra Pradesh Maharashtra All states

1. Theory of technology 33.3 50.0 31.6 38.3

2. Use of computers 77.8 58.3 52.6 62.9

3. Use of tools 00.0 50.0 10.2 30.1

4. Practical use of machines 44.4 66.7 31.6 47.9

5. Use of drawings 33.3 58.3 36.8 42.8

6. Use of written instructions 11.1 33.3 00.0 22.2

7. Theory of equipment maintenance 44.4 25.0 21.1 30.2

8. Communication and team work practices 44.4 33.3 63.1 46.9

9. Knowledge of labour law and industrial relations 66.7 66.7 47.4 60.2

10. Safer working practices 44.4 33.3 00.0 25.9

11. Discipline and accuracy 00.0 50.0 42.1 30.7

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Annex 14

Assessment of skills shortages by public training graduates

Type of knowledge and skills that graduates lack Orissa Andhra Pradesh Maharashtra

1. Theory of technology 4.9 39.7 36.6

2. Use of computers 38.9 48.3 62.0

3. Use of tools 8.8 44.3 35.5

4. Use of machines 11.4 50.6 42.1

5. Use of drawings 3.6 34.0 29.6

6. Use of written instructions 3.8 33.0 24.4

7. Theory and practice of equipment maintenance 7.7 43.2 40.8

8. Communication and team work practices 8.4 37.1 32.2

9. Knowledge of labour law and industrial relations 10.5 33.3 41.4

10. Safer working practices 7.6 30.0 28.4

11. Discipline and accuracy 3.8 23.6 31.0

Sample 2 136 940 7 980

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Annex 15

List of ITI short courses in Maharashtra

Name of the course Duration Fee (INR) General education required

Consumer courses

1. Motor rewinding 1 month 500 Grade 10 pass

2. Maintenance and repair of domestic appliances 1 month 500 Grade 10 pass

3. Electronics, radio and TV repair 1 week 300 Grade 10 pass

4. Manufacture of emergency tube light 1 week 250 Grade 10 pass

5. Hobby projects in electronics 1 week 250 Grade 10 pass

6. Power electronics 2 weeks 200 Grade 10 pass

7. Digital electronics 2 weeks 400 Grade 10 pass

8. Crush programme on computer hardware 2 weeks 300 Grade 10 pass

9. Public address system 1 week 500 Qualification not required

10. Instrumentation electronics 1 week 200 Grade 10 pass

11. Microprocessor-based applications 3 days 100 Grade 10 pass

12. Telephone repair 1 week 200 Grade 10 pass

Short courses for self-employment

1. Fabrication from alumina sections Unspecified educational requirements

2. Two-wheeler repair and services

3. Auto electrician

4. Chrome and nickel plating

5. Blow and injection moulding

6. Spray and lustre wall painting

7. TIG-MIG plasma welding

8. Motor-driving

9. CNC machine operation

10. Computer hardware

11. Computer literacy courses

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Annex 16

Generating self-employment through community services centre, ITI Ambernath, Maharashtra

A community services centre was established in the above institute to enable it to advertise and obtain orders from the community in plumbing, painting, masonry, welding and wood work, etc. and implement this work with the use of former graduates and equipment available in the ITI. This results in the more efficient utilization of the premises and equipment and strengthens the abilities of the ITI graduates in starting up their future businesses.

The community services centre implements income-generating activities in the following areas:

– Furniture making for households and schools

– Electrical wiring of houses and buildings

– Repair of domestic appliances

– Servicing air conditioners and refrigerators

– Repair of TV and radio

– Fabrication of grills

– Painting of sign boards

– Typewriting and desk top publishing

– Video shooting

– Two/four wheeler repair and services

– Rickshaw and taxi meter testing and PUC. testing

– Computerized wheel alignment on vehicles

– Chocolate and ice-cream making

– Candle making

– Rubber molding

– Horn melting and handicraft making

– Preparing building plans

In addition to the day-to-day services, the community centre entered into agreements with cooperative housing societies for cleaning water tanks, maintenance and repair of electric motors, staircases, inspection and repairs of drainage pipes, electrical repairs, inspection and maintenance of those facilities two to three times a year. Nominal charges of such annual contracts are between Rs.800 and Rs.1,500 a year.

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Annex 17

Typical budget of the ITI (Orissa) 1 FY 2001-2002

Budget lines Amount (INR)

1. Salaries 1 327 000

2. Travel 2 000

3. Electricity 35 000

4. Telephone 4 000

5. Postal 2 000

6. Stationery 1 500

7. Miscellaneous 3 500

8. Stipend and scholarships 10 000

9. Training materials (consumables) 33 000

10. Part-time staff remuneration 6 000

11. Equipment maintenance –

12. Medicine (first aid) 500

13. Games and recreation 500

14. Books/periodicals 500

15. Visits to industry (transportation) 3 000

16. Workshop uniform 2 000

17. Hostel contingencies 500

18. Trade tests 1 000

19. Contingency wages 15 000

Total (rounded) 1 450 000

1 Staffing details of the above Women Training Institute are as follows. There are 20 staff (six regular teachers and a principal, one part-time teacher, three office assistants, eight support staff). Enrolment constitutes 87 full-time students in five trades – electronics/mechanics, cutting and tailoring, dress making, stenography, and bakery.

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Annex 18

Record of meeting with graduates of the Industrial Training Centre/Private: Morwadi, Pune, Maharashtra (8 May 2003)

A meeting was held with 15 graduates of ITC, Morwadi, Pune on 8 May 2003. These graduates belonged to different trades viz. electrician, refrigeration and air-conditioning, welding, etc. Most of them graduated in the year 2001 (10 nos.) and the others in 1993, 1995, 1999 and 2002.

Of 15 graduates, 13 (87 per cent) reported that they are self-employed in the field of welding, electrical wiring, servicing of refrigerators and air-conditioning, servicing/ repairing of motor vehicles etc. and earning monthly more than Rs.5,000, including one graduate whose annual turnover ranged between Rs.2-3 lakh per annum by way of taking a tender contract from the Municipal Corporation of Pune. A few of them have also become employers by employing four to eight workers.

Out of 15, six graduates (40 per cent) shifted from wage employment to self-employment for the following reasons:

– no security in the job;

– low wages and irregular payment of wages.

Of the graduates, 27 per cent were working in areas different from the trade in which they were originally trained in ITC, e.g. a graduate welder has changed his profession and is presently working as an electrician.

The customer load in their micro enterprises remain reasonable being about one to two customers per day. However, the market of services is rather close to saturation. Many graduates reported a number of reasons for non-performance of their optimum skills, which they acquired at the ITC:

– Purchase of latest equipment is quite expensive reducing their range of services and a capability to compete with larger firms.

– High cost of opening a shop in the main market ranging from INR 60,000 to 200,000.

– Barriers to become associated with the branded firms to become their authorized dealer/franchisee, e.g. opening an authorized Maruti service centre requires huge investment.

– Less/no exposure to new technology.

– Tough competition in the market.

They also informed the mission that they could have performed better in their present business if additional skills in related fields were imparted to them, like electricians also acquiring the basic skills in electronics.

There was no regular interaction between the ITC and the graduates of different years.

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Annex 19

National vocational qualifications of India, 2002

Trade Course duration (months)

1. Welder (gas and electric) 12

2. Foundryman 12

3. Mechanic (Diesel) 12

4. Plumber 12

5. Mason 12

6. Upholster 12

7. Mechanic tractor 12

8. Sheet metal operator 12

9. Forger and heat treater 12

10. Plastic processing 12

11. Carpenter 12

12. Pump operator/mechanic 12

13. Phototype setter and desk top publisher 12

14. Desk top publishing operator 12

15. Computer operator and programming assistant 12

16. Pattern maker 24

17. Painter (general) 24

18. Wireman 24

19. Mechanic (motor vehicle) 24

20. Mechanic (agricultural) 24

21. Fitter 24

22. Turner 24

23. Machinist 24

24. Mechanic (watch and clock) 24

25. Electrician 24

26. Instrument mechanic 24

27. Electroplator 24

28. Mechanic (radio and TV) 24

29. Mechanic-operator (electronics) 24

30. Tool and dye maker (press tools) 36

31. Tool and dye maker (dyes and moulds) 36

32. Mechanic (refrigeration and air conditioning) 24

33. Machinist (grinder) 24

34. Millwright (maintenance mechanic)/mechanic (machine tool maintenance)

24

35. Draughtsman (mechanical) 24

36. Draughtsman (civil) 24

72 Gasskov.doc

37. Surveyor 24

38. Electronic mechanic 24

39. Maintenance mechanic (chemical) 24

40. Attendant operator (chemical) 24

41. Laboratory assistant (chemical) 24

42. Information technology and electronics system maintenance 24

43. Hand weaving 12

44. Cutting and sewing 12

45. Embroidery 12

46. Book binder 12

47. Cane willow and bamboo 12

48. Weaving of silk and woollen fabrics 12

49. Weaving of woollen fabrics 12

50. Manufacture of footwear 12

51. Leather goods 12

52. Dress making 12

53. Baker and confectioner 12

54. Preservation of fruits and vegetables 12

55. Photographer 12

56. Bleaching and dyeing 12

57. Stenography (English) 12

58. Secretarial practice 12

59. Stenography (Hindi) 12

60. Hair and skin care 12

61. Steward 12

62. Craftsman food production (general) 12

63. Craftsman food production (vegetarian) 12

64. Process cameraman 12

65. Plate maker 12

66. Litho-offset machine 12

New trades introduced under CTS as of January 2003

1. Dairying

2. Floriculture

3. Library and information science

4. Horticulture

5. Insurance

6. Health sanitary inspection

7. Hospital housekeeping

8. Institution housekeeping

9. Pre/play-school management

10. Building maintenance

Gasskov.doc 73

11. Dental technician

12. Medical transcription

13. Domestic housekeeping

14. Cabin crew attendant

15. Creche management

16. Old-age care

17. Corporate housekeeping

18. Data entry operator

19. Networking technician

20. Digital film photographer

21. Auto mechanic

22. Fashion technology

23. Event management assistance

24. Interior decorator

25. Front office assistant

26. Sanitary hardware fitter

27. Tourist guide

28. Mechanic lift maintenance

29. Architectural assistant

30. Driver-cum-mechanic (light motor vehicle)

Additional new trades identified for introduction as of August 2003

Mechanic (computer hardware)

Mechanic (medical electronics)

Mechanic (consumer electronics)

Mechanic Industrial Electronics

Mechanic mecatronics

Operator advanced machine tools)

74 Gasskov.doc

Annex 20

List of training institutes surveyed

N Name of the institute Type

Orissa

1. ITI Berhumpur Public

2. ITI Puri Public

3. ITI Talcher Public

4. ITI Phulbari Public

5. ITI Balasore Public

6. ITI Takatpur Public

7. ITI Banbil Public

8. ITI Rourkela Public

9. ITI Hirakud Public

10. ITI Bolangir Public

11. ITI Cuttack Public

12. ITI Chatrapur Public Women

13. ITI Dhenkanal Public Women

14. ITI Anandpur Public Women

15. ITI Bough Public Women

16. ITI Bhubaneshwar Public Women

17. ITI Baragarh Public Women

18. ITI Bolamgir Public Women

19. ITI Cuttack Public Women

20. PCITI Baripara Public Women

21. C.V. Raman ITC Bhubaneshwar Private

22. ITC Angul Private

23. ITC Pathani Samanta, Angul Private

24. ITC Vasudev, Talcher Private

25. ITC Maa Budhi, Angul Private

26. ITC Rengali, Angul Private

27. ITC Paradip Private

28. ITC Ganesh, BBSR Private

29. ITC Mahanadi, Cuttack Private

30. ITC TTEDC Talcher Private

31. ITC Jagatpur Cuttack Private

32. Utkal Education Institute Cuttack Private

Andhra Pradesh

1. ITI Dindi Project Public

2. ITI Krushi Public

3. ITI, Sangareddy Public

Gasskov.doc 75

4. ITI Secunderabad Public

5. ITI Shadnagar Public

6. ITI Old city Public

7. ITI Alwal Public

8. ITI Malleputty Public

9. ITI Kalwakurthy Manr Dt. Public

10. ITI Patancheru Public

11. ITI Bhongir Public

12. ITI Mahabubnagar Public Women

13. ITI Nalgonda Public Women

14. ITI Mahabubnagar Public

15. ITI Medchel Public

16. ITI Mallepally Public Women

17. ITI Sandhinagar Public

18. ITI Mannanoor Public

19. ITI Quli Qutub Shah Public Women

20. The Nizam and Alladin Tech.Institute, Hyderabad Private

21. ITC Naveen, Nalgonda Private

22. ITC Ravi Narayan Reddy Private

23. ITC Sri Sarada, Miryalaguda Private

24. ITC Marconi Private

25. ITC Boys Town, Jahanuma Private

26. ITC Fátima Private

27. ITC Tirumala Private

28. ITC Saikrupa Private

29. ITC Sri Balaji Private

30. ITC Sri Sai Private

31. ITC Medak Private

32. ITC Sri Sai, Siddipet Private

33. ITC Annapoorna Private

Maharashtra

1 ITI Mumbai, Sane Guruji Marg Public

2. ITI Dadar Public

3. ITI Lower Parel Public

4. ITI Borivali Public

5. ITI Andheri Public

6. ITI Mulund Public

7. ITI Kurla Public

8. ITI Govandi Public

9. ITI Thane Public

10 ITI Thane Public Women

11. ITI Belapur Public

76 Gasskov.doc

12. ITI Ambarnath Public

13. ITI Bhiwandi Public

14. ITI Wangaon Public

15. ITI Palghar Public

16. ITI Vasai Public

17. ITI Murbad Public

18. ITI Jawhar Public

19. ITI Kalyan Public

20. ITI Shahapur Public

21. ITI Talasari Public

22. ITI Mokhada Public

23. ITI Wada Public

24. ITI Aundh Pune Public

25. ITI Aundh Pune Public Women

26. ITI Ghodegaon Public

27. ITI Lonawala Public

28. ITI Pimpri Chinchwad Public

29. ITI Manikdoh Public

30. ITI indapur Public

31. ITI Malegaon Public

32. ITI Daund Public

33. ITI Bhor Public

34. ITI Shirur Public

35. ITI Varvand Public

36. ITI Khed Public

37. ITI Purandar Public

38. ITI Velhe Public

39. ITC Pune Public

40. ITC Pradhikaran Pune Private

41. ITC Chinchani Private

42. ITC Khadipur Private

43. ITC K. Mahim Private

44. ITC Fr. Agnel Ashram, Mumbai Private

45. ITC Phulgaon, Pune Private

46. ITC Boribhadak, Pune Private

47. ITC Shirur, Pune Private

48. ITC Vadaj, Pune Private

49. ITC Bhiwandi Private

50. ITC Shad Adam Shaikh Private

51. ITC Vasai Private

52. ITC Jogeshwari, Mumbai Private

53. ITC Vashi Private

Gasskov.doc 77

54. ITC Byculla, Mumbai Private

55. ITC Tal-Junner, Pune Private

56. ITC Dadar, Mumbai Private

Overall, 121 training institutes (78 public and 43 private).

78 Gasskov.doc

Annex 21

List of companies interviewed

Orissa

1. ICCL, Chowdwar

2. Paradeep Port Trust

3. East Coast Breweries

4. Kalinga Engineers

5. IPISteel, Dhenkanal

6. Orissa Poly Fibres (P) Limited

7. Talchar Thermal Power Corporation

8. NALCO, Angul

9. Nava Bharat Ferro Alloys

10. Tripti Drinks (P) Ltd.

11. Central Orissa Straw Board

12. Pradeep Phosphate

13. Utkal Asbestos, Dhankanal

14. Mahanadi Coal Ltd.

15. Indfab, Angul

16. Navochrome, Talcher

Andhra Pradesh

1. Amogh Hotel, Ltd.

2. Sangam Health Care, Ltd.

3. Great Wholesale Club Ltd.

4. R.C.C. Sales (Pvt) Ltd.

5. Biological “ E” Ltd.

6. Shantua Biotechnics, Ltd

7. The Mithra Agencies

8. VST Industries, Ltd.

9. Kakati Karshak Industries, Ltd.

Gasskov.doc 79

10. Nile Ltd.

11. Microrej Electronics, Ltd.

12. Vidyuth Control Systems. Ltd.

Maharashtra

1. Mahindra and Mahindra Ltd. Kandivali (E), Mumbai

2. Cable Corporation of India Ltd. Borivali (E), Mumbai

3. Special Steel Lt6d. Borivali (E), Mumbai

4. Cadbury India Ltd. Mahalaxmi, Mumbai

5. Excel Industry Ltd. Jogeshwari (W), Mumbai

6. Ffizer Ltd. Jogeshwari (W), Mumbai

7. Keshavlal Talakchand, Group No.2 Mumbai

8. Crompton Greeves Ltd. Kanjur Marg (E), Mumbai

9. Hindustan Liver Ltd. Shivri, Mumbai

10. Special Oils Refinery Pvt. Ltd. Trombay, Mumbai

11. Tata Electric Co. Chembur, Mumbai

12. Bharat Gears Ltd. Nariman Point, Mumbai

13. Global Telesystems Ltd. (OTLV) Narsinath Street, Mumbai

14. Laurson and Toubro Ltd. Powai, Mumbai

15. N.R.C. Ltd.

16. Century Rayon Ltd. Sahad

17. Balakrishan Industrial Ltd. Ambernath

18. Wimco Ltd.

19. Ambernath Municipal Council Ambernath

20. Mirc Electronics Ltd. (Onida) Kuduswada

21. Rotex Manufacturing and Engineering Pvt. Ltd. Dombovali (E)

22. Colourchem Ltd.

23. Barligatns Export Waghale Baloons Paints Equipment Pvt. Ltd. Waghale

24. Automatic Electric Ltd. Waghale

25. Blue Star Ltd.

26. Voltas Ltd.

80 Gasskov.doc

27. N.R. B Ltd.

28. Hajif B.Tex Ensireshan Ltd.

29. Mahindra Standard Products Ltd. Pimpri

30. Manthur and Plot (India) Ltd. Chinchwas

31. Thaijes Group of Industries Pimpri

32. Kinatic Engineering Ltd. Chinchwad

33. Gange Prssing Ltd. Chinchwad

34. Comins India Ltd. Pimpri

35. Bharat Forge Ltd. Mundwa

36. Elpro International Chinchwad

37. Padamji Paper and Pulp Thorgaon

38. S.K.F. Bearing Ltd. Chinchwad

39. Suljar (I) Ltd. Kasarwadi

40. Alfa Lanvala (I) Ltd. Kasarwadi

41. Virgo Engineers Pvt. Ltd. Kasarwadi

42. Atlas Capco Ltd. Kasarwadi

43. Koyal Small Engine Division Fursungi

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Annex 22

Project of the Government of India/proposal

Title: Improving Efficiency of Industrial Training Institutes through National Training System Management Reform

Short title: Management Reform of Industrial Training Institutes

Estimated starting date: 01/01/2004

Estimated end date: 01/10/2007

Project site: Three selected states of India (20 industrial training institutes)

Executing agency: Directorate General of Employment and Training, Ministry of Labour, GOI

Implementing agency: International Labour Organization (ILO)

1. Employment and skills development problem in India

The labour market situation

India’s labour force has reached 375 million in 2002 and will continue to expand over the next two decades. Some projections suggest that the labour force increase will amount to 7-8.5 million a year. To a large extent, the GDP growth of 6.7 per cent (2000) has been achieved in India almost without employment growth (being only around 1 per cent). Many large enterprises have been shedding labour while the capacity of agriculture to absorb workers is minimal. The growth and the employment absorption capacity of the unorganized economy is seen to be much higher than of large industry. The workforce of the unorganized sector remains mainly low-skilled which results in rather low quality of goods and service delivered.

National training system

Formal vocational training programmes in India are delivered under the Craftsmen Training Scheme, with the training provision being conducted by Industrial Training Institutes (ITIs). The state governments establish, administer and fund them. Their staff are civil servants and their assets are owned by respective state governments.

The state governments operate some 4,650 vocational training establishments, which have a total capacity of 678,000 training seats. Out of this, nearly 373,000 seats are in some 1,800 government ITIs, and the residual 305,000 are in some 2,850 private Industrial Training Centres (ITCs). The number of vocational training institutes in India has shown a rapid growth over years with the current growth, however, being mostly driven by the private training providers.

Employment and skills development problem

The study of the ITIs’ efficiency in the three States of India has been conducted by the joint team of the ILO, New Delhi and DGE&T, GOI. The study findings suggest that:

– Because of the slow growth of employment in the organized sector, it is unable to employ even a small share of annual training graduates and it seems that this situation will prevail in a foreseeable future.

– In spite of the significant change in the economic and labour market environment, ITIs continue to produce graduates in basic industrial trades for the organized sector that results in their low employability.

82 Gasskov.doc

– The ITI graduates, who are the National Trade Certificate holders, are basically unwilling to join the unorganized sector which offers low remuneration and poor working conditions.

– The ITIs operate with low operational autonomy and flexibility, are non-responsive to labour market demand for skills, and are unable therefore to ensure reasonably high employability of their graduates

– The ITIs are considerably under-funded by respective state governments and have no or few additional sources of revenue to improve their operations, buildings and equipment.

– The range of national vocational qualifications is very limited as they mostly involve basic industrial trades. It lacks occupations that are considered to be better employable in the fast growing economic sectors like personal care, forestry, agro-processing, commerce and financial services, etc.

– ITI staff, who are civil servants, operate in conditions of various administrative and financial constraints and lack opportunities as well as incentives to improve their efficiency.

– ITIs have been unable to address the problem of skills training for unorganized economy as well as for low-literate, mostly rural youth. This group that represents almost 92 per cent of the national labour force does not qualify for and cannot afford to be involved in the formal long-term training programmes.

– The demand for ITI training services particularly in the new and modern trades and shorter courses will continue to increase in future under the pressure of increasingly competitive economy and demographic growth.

– New relations need to be established between State Governments and ITIs. The new set-up would encourage training institutes to deliver more services, improve the student enrolment, retention and graduation rates, and would hold the ITIs accountable for improving employability of their graduates.

The above findings suggest that there is an urgent need to remove administrative and reduce financial constraints for public ITIs enabling them to improve operational flexibility, responsiveness and, therefore, efficiency. These improvements can only be achieved through offering greater autonomy and operational freedom to them, strengthening their management system, as well as reforming the national system of vocational qualifications.

This project will develop a sample of the ITIs in the three states of India as autonomous, flexible and efficient training institutes fully prepared to operate in the training market. 1

ITIs will be given more freedom of choice, but will be placed under the new accountability framework and will be funded through a reformed financial mechanism.

2. Proposed directions for the training system reform

A. The ITIs will become autonomous public training institutions governed by their Management Boards in which government, employer and the union representatives participate. Principals of ITIs would be employed by their Management Boards. All other teaching and non-teaching staff, both full-time and part-time, will also be employed by Management Boards. This assumes that the employment status of the ITI staff will change dramatically. The land, building title and institutional assets will be assigned to the ITI Management Boards for efficient management.

1 This policy has already been pronounced by the Government of India in its ($22 m.) project proposal to convert 100 training institutes into centres of excellence.

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B. The ITIs will operate within the planning, financing and accountability framework that will be described in the National ITI Charter. This Charter will establish the level and profile of the ITIs’ autonomy, their rights and obligations as well as the most important management, financing and reporting procedures. ITIs’ Management Boards will report to the state governments on all subjects regarding the implementation of the Charter, their activities and outputs financed by government funds, as well as on the condition and utilization of their institutional assets. On the basis of the project experience, subject to the decision of the Government, the National ITI Charter may be converted into a legal document/s.

C. In order to obtain public funding, an individual ITI would have to conclude an annual service agreement with the state government. The agreement would specify the number of students/annual hours of curriculum delivered and the type of training programmes which will be financed by the government. Therefore, funding will be allocated to activities and outputs rather than to training institutes. This will require ITIs to achieve and maximize the utilization of full training capacity and provide training in the trades with which graduates would have a greater chance of being absorbed by the market. This will save government funding, increase the output, and reduce the training unit cost. The funding system will essentially become student-driven. When students drop-out, so will the funding allocated to respective ITIs.

D. ITIs will be given the right to charge fees for specified training and other services In order to recover part of their cost, while the fee ceilings will be subject to the DGE&T as well as the state governments’ directives. ITIs will have the right to generate and spend revenues on upgrading their buildings and equipment, developing new courses, retraining their staff, etc. and in certain cases, to top-up the staff wages. All this would help to improve incentives and free staffs’ initiative.

E. The national system of vocational qualifications will be revised to become a competence-based system. Skills standards for such qualifications will be developed in close cooperation with industry or by industrial sectors themselves. National vocational qualifications will involve grades allowing workers and employers to distinguish between the achieved levels of competence and to move from one level to another. The system of skills assessment and certification would be adjusted to recognize skills acquired through practical experience to become applicable for the informal economy workers. Vocational programmes should become modular-based.

3. Project objective

To assist the Government of India in designing and implementing its decentralized management system in the skills development sector. This will result in the improved operational flexibility, responsiveness and efficiency of public ITIs.

4. Proposed outputs and activities

Output 1.0

A draft proposal concerning the legal, management and financing reform at ITIs is outlined and a consultation process between the Governments, ITIs and the social partners implemented.

Activities:

1.1. To draft a proposal on the ITI management reform including their new legal status, management, transfer of property rights, generation and utilization of revenues, etc.

1.2. To examine issues of ITI staff employment, social security, etc. and develop a proposal on their employment and staffing flexibility.

1.3. To develop a proposal on the new financing system for ITIs that would be enrolment-based and would also allow the student fee-based funding.

1.4. To draft a National ITI Charter which would set up a legal, administrative, management and financing framework for autonomous public ITIs.

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1.5. Conducting a national workshop to discuss the reform proposal.

Output 2.0

A proposal on the adjustment of the national training policy reflecting change of ITIs’ status and new operational requirements drafted and a consultation process between the governments and social partners implemented.

Activities:

2.1. Suggesting changes to the national training policies, reflecting new objectives and operational arrangements, and expanding the national training target group to the unorganized economy workers, etc.

Output 3.0

A proposal on the change of the national vocational qualifications framework allowing the introduction of new vocational qualifications in the fast growing areas of employment drafted and a consultation process between the governments and social partners implemented.

Activities:

3.1. To review the institutional, legal and organizational arrangements regarding the development of national vocational qualifications in India.

3.2. To suggest and implement a reform of national vocational qualifications that should become competence-based, involve levels of competence, etc.

3.3. To identify new promising trades and develop vocational qualifications cooperation with corresponding industry and services sectors

Output 4.0

The above management, legal and financing reform is piloted on a sample of ITIs in selected states.

Activities:

4.1. To train staff of selected ITIs as well as of corresponding departments of the state governments and of DGE&T enabling them to operate in conditions of decentralized management.

4.2. To assist state governments in exploring a possibility for the ITIs to provide skills training for the unorganized sector workers in basic industrial and other trades.

4.3. To assist state governments in developing new interrelations with the ITIs that would be based on service agreements and accountability.

4.4. To propose changes in the management structure and functions of the corresponding departments of the state governments and DGE&T, if need be, to allow supervision of the autonomous training institutions.

4.5. To develop rules for appointment and operation of ITI Management Boards, and to introduce new rules for employment and remuneration of staff, etc.

5. Project staff requirements

– National Project Director with management background

– Management training specialist with knowledge of decentralization in the education and training sector (international, short term)

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– Management training specialist with knowledge of decentralization in the education and training sector (national, short term)

– Training financing specialist (international, short term)

– Training financing specialist (national, short term)

– Vocational qualifications development specialist (international, short term)

– Vocational qualifications development specialist (national, long term)

– Skills assessment and certification specialist (international, short term)

– Skills assessment and certification specialist (national, long term)

– Curriculum development specialist (international, short term)

– Curriculum development specialist (national, long term)

6. Approximate budget:

US$5 million

Industrial training institutes of India: the efficiency report

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Transcript of Industrial training institutes of India: the efficiency report