efficiency report iti
TRANSCRIPT
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
ContentsPage
Acknowledgements.................................................................................................................. Executive summary .................................................................................................................. List of acronyms ...................................................................................................................... Section 1. 1.1. 1.2. Background of the study ........................................................................................ Terms of reference for the study ............................................................................. Employment growth and demand for skills training .................................................1.2.1. Employment growth in India............................................................................................... 1.2.2. Proposed changes in the National Vocational Training Programme................................ 1.2.3. Principal challenges.............................................................................................................
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1.3.
Brief on the vocational training policy and system ...................................................1.3.1. 1.3.2. 1.3.3. 1.3.4. 1.3.5. 1.3.6. 1.3.7. Education and training of the Indian labour force ............................................................. Overview of the vocational training system....................................................................... National vocational training policies.................................................................................. Management structure of the vocational training system.................................................. Principal training schemes................................................................................................... Support system for vocational training............................................................................... Growth of public and private training provision................................................................
55 6 7 8 9 10 12
Section 2. 2.1.
Efficiency of industrial trainin g institutes ................................................................ The evaluation methodology ..................................................................................2.1.1. Efficiency concept and indicators ....................................................................................... 2.1.2. Evaluation instruments ........................................................................................................ 2.1.3. Coverage of the study ..........................................................................................................
14 1414 15 16
2.2.
Principal findings ..................................................................................................2.2.1. Training provision in the three surveyed states of India.................................................... 2.2.1.1. Orissa..................................................................................................................... 2.2.1.2. Andhra Pradesh..................................................................................................... 2.2.1.3. Maharashtra........................................................................................................... 2.2.2. Diminishing demand from organized industry for training graduates.............................. 2.2.3. The problem of training supply and demand imbalances.................................................. 2.2.4. Internal efficiency of training institutes.............................................................................. 2.2.5. External efficiency of training institutes ............................................................................ 2.2.5.1. Readings of efficiency indicators ........................................................................ 2.2.5.2. The employment status of graduates................................................................... 2.2.5.3. Utilization of knowledge and skills acquired in training institutes .............................................................................................. 2.2.5.4 Main activities of graduates who were not in employment or self-employment ......................................................................... 2.2.5.5 Limited role of training institutes in producing skills for the unorganized sector..........................................................................
1616 16 17 20 24 25 27 30 30 31 32 33 34
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2.2.5.6
Employer assessment of skills shortages...........................................................
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2.3.
Summary listings of findings ..................................................................................2.3.1. 2.3.2. 2.3.3. 2.3.4. Training policy challenges .................................................................................................. Operational efficiency and accountability of ITIs ............................................................. Training supply management .............................................................................................. National vocational qualifications ......................................................................................
3636 37 40 42
Section 3. R1. R2.
The agenda for reform ........................................................................................... Respond to policy challenges ................................................................................. Provide greater autonomy to ITIs and introduce the accountability framework ..........R2.1. Expand scope of autonomy ................................................................................................. R2.2. Reform management structures........................................................................................... R2.3. Establish new relations between state governments and ITIs ...........................................
43 43 4343 44 44
R3.
Reform the ITI funding mechanism ........................................................................R3.1. Introduce enrolment-based funding.................................................................................... R3.2. Encourage income -generating opportunities...................................................................... R3.3. Upgrade ITI capital assets ...................................................................................................
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R4.
Improve training supply management .....................................................................R4.1. Adjust training provision to employment growth forecasts.............................................. R4.2. Address skills needs of low-literate youth.......................................................................... R4.3. Support initiatives aimed at improving efficiency.............................................................
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R5. R6.
Adopt a strategy for restructuring training provision ................................................ Reform the national vocational qualifications framework .........................................R6.1. Introduce new vocational qualifications and training programmes.................................. R6.2. Address the problem of skills recognition..........................................................................
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R7. Annexes 1. 2. 3. 4. 5. 6. 7. 8. 9.
Implement the trainin g system management project .................................................
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Questionnaire for survey of industrial training institute ..................................................... Questionnaire for survey of ITI graduates......................................................................... Questionnaire for survey of enterprises ............................................................................ Evaluation coverage in the three states of India ................................................................. Internal efficiency of training institutes, Orissa ................................................................. Internal efficiency of training institutes, Andhra Pradesh ................................................... Internal efficiency of training institutes, Maharashtra ........................................................ Proportion of ITI graduates in the workforce of industrial enterprises ................................. Occupational structure of the organized economy and supply of graduates in Orissa...................................................................................................... Occupational structure of the organized economy and supply of graduates in Andhra Pradesh .......................................................................................
49 51 53 56 57 58 59 60
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10.
62
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11.
Occupational structure of the organized economy and supply of graduates in Maharashtra ............................................................................................ Employment status of graduates, trade-wise, Maharashtra ................................................. Employer assessment of skills shortages of graduates of public ITIs................................... Assessment of skills shortages by public training graduates ............................................... List of ITI short courses in Maharashtra ........................................................................... Generating self -employment through community services centre, ITI Ambernath, Maharashtra ........................................................................................... Typical budget of the ITI ................................................................................................ Record of meeting with graduates of the Industrial Training Centre/Private: Morwadi, Pune, Maharashtra (8 May 2003)............................................... National vocational qualifications of India, 2002 .............................................................. List of training institutes surveyed ................................................................................... List of companies interviewed ......................................................................................... Project of the government of India/proposal .....................................................................
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12. 13. 14. 15. 16.
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17. 18.
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19. 20. 21. 22.
Tables 1. 2. Annual vocational training capacity of ministries/departments in India............................... Theoretical seating capacity available for training in engineering and non-engineering trades in India........................................................................................ Public and private training provision in the three states of India (2002-03) ......................... Indicators of internal efficiency of training institutes ........................................................ Indicators of external efficiency of training institutes ........................................................ Enrolments in regular NCVT courses in the Nizam and Alladin Technical Institute/private, Andhra Pradesh...................................................................... Share of ITI training in the education and training markets in Maharashtra ......................... Internal efficiency of public ITIs in the three states of India (sample averages, all trades) ............................................................................................ Internal cost-efficiency of public and private training institutes.......................................... External efficiency of public ITIs in the three states of India (all trades) ............................. External efficiency of private ITCs in the three states of India (all trades) ........................... Employment and education and training status of graduates, all trades (percentage of all graduates interviewed) ........................................................... 7
10 13 14 15
3. 4. 5. 6.
19 21
7. 8.
28 29 31 31
9. 10. 11. 12.
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13.
Utilization of knowledge and skills acquired in training institutes (percentage of all graduates interviewed).......................................................................... Major activities of graduates who were not in employment or self-employment ............................................................................................................. Major forms of further education and training of ITI graduates (percentage of all graduates who responded)..................................................................... Share of companies that experienced problems of finding employees with required skills .........................................................................................................
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14.
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15.
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16.
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Graphs 1. 2. 3. Literacy levels of Indian workforce.................................................................................. Proportion of the vocationally trained labour force of India (aged 20-24)............................ Growth of public and private training institutes over the last 50 years................................. 6 6 12
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AcknowledgementsThis 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 summarySection 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 Indias labour force reached 375 million in 2002 and will continue to expand over the next two decades. Some projections suggest that the labour force i crease will amount to n 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 s ome 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&Ts 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 statelevel 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-cumproduction 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 supplydemand 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 t aining institutes covered 6,660 r 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. (a) To review the national training policy in order to recognize the need for: 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. Adopt a strategy for restructuring the ITIs training provision through: selective reduction of enrolments on long-term courses in basic industrial trades;
R 5. (a)
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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 acronymsDGE&T, GOI Directorate General of Employment and Training, Government of India International Labour Organization Industrial Training Institute Industrial Training Centre National Council for Vocational Training State Council for Vocational Training
ILO ITI ITC NCVT SCVT
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Section 1. Background of the study1.1. Terms of reference for the studyThe 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 IndiaEconomic growth versus employment growth Indias 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 economys 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 Indias 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 knowledgeintensive 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, Indias 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 countrys 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.
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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 ProgrammeThe 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 n n n n
Encourage expansion of the private training provision. Improve the state governments allocation for skills training. Adopt distance learning and other alternative training delivery mechanisms. Introduce skills training for poverty alleviation programmes. Strengthen the Skills Training Programme for Women and disadvantaged groups.
Improvement of effectiveness, efficiency and relevance of training:n n n n
Strengthen interaction between industry and ITIs. Improve staff development and motivation. Introduce modular training and multi-skilling. Introduce competency-based certification for workers without formal training.
Improvement of management of the national training system:n n
Form state-level bodies to provide guidance to ITI operations. Review the national classification of occupations.
4
Targeting 10 million employment opportunities per year, op. cit.
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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. Re-establish some 100 ITIs as centres of excellence that will be registered as autonomous bodies and have linkages to industry.
n
Training for the informal economy:n n n
Develop a policy framework enabling training for the unorganized economy. Conduct surveys of training needs in the informal economy. Open training-cum-production centres to address skills training needs.
1.2.3. Principal challengesThe 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 governments 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 forceEducational 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).
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Graph 1.
Literacy levels of Indian workforce
Primary school 23%
Illiterate 44%
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)
Proportion of Vocationally Trained
120 100 80 60 40 20 0
KOREA JAPAN GERMANY CANADA MEXICO INDIA
1.3.2. Overview of the vocational training systemThe 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.
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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&Ts 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 IndiaMinistry/Department M/o Health and Family Welfare M/o Human Resource Development Vocationalization of Secondary Education Apprenticeship training National Open School D/o Information Technology DOEACC O level M/o Labour (DGET) Apprenticeship Training Scheme Craftsmen Training Scheme Other long-term training programmes D/o Small Scale Industries D/o Tourism (Food Crafts institutes) TOTAL Estimated training capacity/persons trained (annually) 0.20 lakh 4.9 lakh (utilization is about 40%) 0.19 lakh 0.067 lakh 0.75 lakh About 5.0 lakhs About 1.5 lakhs 0.07 lakh 0.02 lakh 0.011 lakh 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 policiesThe 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.
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Most of the above policy notions are well pronounced in the draft National Policy on Vocational Training of India. 5 However, the training systems 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 systemNational 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 Womens 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.
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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 schemesAmong 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 producin g 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.
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Table 2.
Theoretical seating capacity available for training in engineering and non-engineering trades in IndiaMinimum educational qualification 8th Standard 10th Standard 12th Standard Number of trades 15 (9 engineering, 6 non-engineering) 50 (35 engineering, 15 non-engineering) 2 (engineering) Number of seats (thousands) 110 546 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 trainingTrades 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 womens 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.
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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&Ts 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 NCVTs subcommittee dealing with affiliation. Instructor and management training The ITI instructors are trained in the Advanced Training Institutes on programmes of one years 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.
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1.3.7. Growth of public and private training provisionUnder 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
5000
4274 3665 1887 2447
4465
4647
4000
NO. OF ITIs
3000
2000
1080 59 1956 167 1962 354 1967 357 1972 356 1978 1982 1987 1992 1997 2000 2001 2002Gasskov.doc
1000
0
YEAR
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).
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Table 3.
Public and private training provision in the three states of India (2002-03)States Public ITIs Number of units Orissa Andhra Pradesh Maharashtra All India 24 82 347 1 800 Annual sanctioned training seats 6 200 14 440 63 300 373 000 Private ITCs Number of units 131 471 265 2 850 Annual sanctioned training seats 11 950 52 740 30 000 305 000
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 ITIs 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.
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Section 2. Efficiency of industrial training institutes2.1. The evaluation methodology
2.1.1. Efficiency concept and indicatorsThe 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 1Indicators 1. Student retention rate 2. Student graduation rate 3. Utilization of the ITI seating capacity 4. Overall internal efficiency 5. Staff utilization Formula Per cent of students who appeared for a trade test out of those enrolled at the beginning of the course Per cent of students who passed the trade test out of those appeared for the trade test Per cent of the total number of sanctioned (planned) training places filled at the time of enrolment Per cent of the total number of sanctioned training places that produce graduates 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.
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Table 5.
Indicators of external efficiency of training institutesIndicators 1. Labour market success of graduates 2. Utilization of knowledge and skills acquired at ITI 3. Satisfaction of graduates with the trade acquired Formula Per cent of graduates who are in wage employment, or selfemployed or employer, or joined family business Per cent of graduates who work in the trade in which they were trained or in a closely related trade Per cent of graduates who reported high satisfaction or satisfaction with the trade acquired
4. Satisfaction of graduates with the training Per cent of graduates who reported high satisfaction or satisfaction received 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 instrumentsThe 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.
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2.1.3. Coverage of the studyThe 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 India2.2.1.1. 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 statelevel courses have not been developed.
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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 systems 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 lowliterate 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 demandsupply 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 feefinanced 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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Gasskov.doc
Table 6.
Enrolments in regular NCVT courses in the Nizam and Alladin Technical Institute/private, Andhra PradeshTrade Electrician Mechanic radio/TV Machinist Turner Fitter Electronics Refrigeration and A/C Total Sanctioned places 40 40 30 30 40 20 20 260 Year 1 19 6 6 1 1 20 20 93 Year 2 16 3 2 3 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 (lets 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