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April 24, 2018

NSDC Amendment Notice for Franchise Training Centers applying for TC to TP Conversion

National Skill Development Corporation (NSDC) release amendment notice for franchise training centers and notifies all training partners and training centers about the changes introduced to Pradhan Mantri Kaushal Vikas Yojana (PMKVY). The brief of notice is notice is as below..

This is to notify all existing Training Partners (hereinafter “TP”/ “TPs”) and Training Centres (hereinafter “TC”/ “TCs”) of the changes introduced to the Pradhan Mantri Kaushal Vikas Yojana (hereinafter “PMKVY”), namely, the new procedure applicable to erstwhile franchise TCs for obtaining accreditation and affiliation so as to be eligible for target allocation.

Right from the inception of the PMKVY, the underlying philosophy has always been that NSDC will partner with various organizations, i.e. the TPs, directly to provide high quality vocational training and improve the skilled workforce of India both qualitatively and quantitatively. In this regard, it is relevant to note para 1.5.2 of the PMKVY Guidelines (2016-2020), which states: “TCs preferably should be standalone centers designed to deliver PMKVY with dedicated resources. However, TC can be used to deliver other government sponsored programs with clearance from respective authorities provided the residual training capacity is available. Franchise centers will be given lower priority and it is planned to gradually phase out franchise arrangements.” (emphasis supplied). Para 1.5.1 states: “…PMKVY aspires to build quality centres with complete ownership and, therefore, discourages franchising arrangements.”

The continuous review of the implementation of the PMKVY has indicated that it would be preferable to ensure that there is only a single unit/entity charged with scheme delivery to minimize scope for leakages and to ensure that the benefits of the scheme accrue to the intended beneficiaries. It was considered expedient to hasten the phasing out of franchise centres in view of several concerns voiced by existing stakeholders, of potential for misuse by intermediaries and consequent disruption in seamless scheme delivery. In pursuance of these policy goals, and pursuant to review meetings of the PMKVY held under the chairmanship of the Secretary, Ministry of Skill Development and Entrepreneurship (hereinafter “MSDE”) on 5th August 2017 and 18th August, 2017, it was decided inter alia that the Training Centres would be considered as units of the PMKVY, and payments would be directly made to such centres; NSDC would enable necessary modifications to its software to enable erstwhile franchise TCs who are interested in receiving PMKVY targets to convert to TPs. Two public notices were put on PMKVY and SMART websites on 31-08-2017 and 09-09-2017. By virtue of these notices, two options were enabled for the erstwhile franchise centers who intended to avail targets under PMKVY 2.0.

Option 1: Become a wholly independent legal entity as a Training Provider, retaining existing name: As stated more comprehensively in the Notice, under this option, a TC applies for conversion into a TP in its own name and provides supporting documents such as PAN, Certificate of Incorporation and Bank Account details.

Option 2: Be owned by existing Training Providers: As stated in the Notice, the registration process will remain the same for TCs that are owned by TPs. Therefore, an erstwhile franchise may choose to enter into a contract with an existing TP (including its own franchisor) for sale of its business. It is clarified that such an arrangement is completely permissible under the new system. However, any disputes arising out of such contracts shall be the sole responsibility of the TC and TP concerned, and NSDC shall bear no liability for the same whatsoever.

It may be noted that upon issuance of notices, the NSDC has made requisite changes in SMART portal to enable the erstwhile franchise TCs to change their legal status in order to avail one of the abovesaid options. The conversion process for the PMKVY was initiated on the basis of applications received by the franchise TCs after logging in to SMART portal through TC login only.

As on 25-10-2017, the status of this conversion is as follows:

• Total No. of Franchise TCs: 2, 667
• TCs that requested for franchise to TP conversion in SMART: 2,087Ready for inspection: 1,852
• Inspection completed: 876
• Applied for SDMS: 1,462
• Onboarded on SDMS: 1055

Furthermore, there has been an ongoing demand from intended beneficiaries for another option of name change of erstwhile TCs and TPs. In this regard, NSDC is providing another option to the erstwhile franchise TCs who wish to continue receiving target allocations under PMKVY to change their TP and TC name while becoming a wholly independent legal entity.The option is described below:

Option 3: Become a wholly independent legal entity as a Training Provider with a new name: This option will entail the same procedure as Option 2, the difference being, that in addition to furnishing the documents specified in the Notice, the TC will also be required to furnish appropriate supporting documents as required by law, indicating that it has changed its name and completed all the necessary formalities for effecting such change. (By way of illustration, a TC which is a private limited company must, in addition to the documents specified in the Notice, furnish copies of the Special Board Resolution authorizing a change of name, application made to the MCA under Form 1B, and new Certificate of Incorporation reflecting the changed name).

Please note that option 3 will be available only to such franchise training centers who have not already opted for option 1 and 2 as of 1700 hrs on 11th October 2017 (List in Annexure 3 – Franchise TCs which have opted for option 1 & 2). The process to access this option is clarified in Annexure 1 (Process for exercising Option 3).

This notice supersedes notice dated 9th September 2017, to allow option 3.

All TPs and erstwhile franchise TCs who wish to avail the PMKVY targets are requested to comply with the above formalities as per the option to be chosen by them at the earliest, if they wish to continue to participate in the PMKVY and receive target allocations according to the relevant guidelines.

For complete notice issued by NSDC, refer notice, Click Here

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