New Delhi: A panel set up by the government has found a “serious conflict of interest” in the functioning of the National Skill Development Corporation (NSDC) recommending that the government review its role and create a strong oversight mechanism.
In its report, the committee for rationalization and optimization of the functioning of the sector skill councils, chaired by Sharada Prasad, former DG of employment and training (DGE&T), said the NSDC has not been able to discharge its responsibilities for setting up sector skill councils (SSCs). Taking note of “lots of instances of serious conflict of interest and unethical practices”, the panel proposed that the work of setting up of SSCs should be transferred to the regulator, the National Skill Development Agency (NSDA).
It is of the view that as NSDC is a funding company in the nature of an NBFC, it should function under the relevant regulations. “The NSDC… Is using almost 100% of government funds without accountability. A strong oversight mechanism should be created for monitoring the outcome as a result of the funds provided by the government,” the panel said. The NSDC is a public-private partnership with 51% equity of the private sector.
“It is essentially a private sector body and, therefore, not competent to undertake regulatory functions,” the panel said in its report. As per its original mandate, the NSDC should mobilize resources for skill development from the industry, financial institutions, multilateral and bilateral external aid agencies, private equity providers and ministries and departments of the central government and states, it suggested. The committee said further the NSDC had not followed any standard criteria for creation of SSCs which “not only increased their number but created overlapping jurisdictions”.
Union minister Rajiv Pratap Rudy had earlier expressed displeasure at the way the NSDC was being run in the past and lashed out at its failure to achieve the industry’s needs for trained manpower. NSDC’s former managing director and CEO Dilip Chenoy and COO Atul Bhatnagar, who were appointees of the previous UPA government, had resigned amid reports that the government was unhappy with the functioning of the skills development body.
Observing that the NSDA is mainly a regulatory body, the panel recommended that the mandate to raise extra-budgetary sources for skill development from various agencies to be withdrawn from the NSDA as it compromises with the regulatory role. It also proposed the DGE&T be brought under the ministry of skill development and entrepreneurship and the name of the ministry should be changed to the ministry of skill development and employment, arguing that entrepreneurship is primarily for self-employment which is covered under employment.
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