The FICCI- KPMG in India Skill Financing in India Report 2023 released at the 14th FICCI Global Skills Summit 2023 says all efforts should be directed to develop a range of options which encourage greater participation from stakeholders to promote an ecosystem which is both self-sustaining and market driven. The report also focuses on policy recommendations for the future of skills financing and academic reforms to bring it at par with international VET systems.
India’s acknowledges dynamic skilling ecosystem has evolved significantly in recent years, driven by the recognition of Technical and Vocational Education and Training (TVET) as a crucial factor for economic development and workforce integration with government handholding. However, TVET remains underfinanced due to several factors such as absence of Innovative Financing Instruments, Limited Role of PE/VC Funds, etc. The report recommends looking at TVET financing models of other countries such as United Kingdom (UK), Germany, Australia, and France, to understand the key stakeholders, their responsibilities, and the mechanisms driving funding.
Among the Emerging Financing Models listed are: Development Impact Bonds (DIBs), Private Equity (PE)/Venture Capital (VC) Funding, Working Capital Financing, Skill Vouchers, Support from Social and Private Foundations, Public-Private Partnerships (PPP), Support from Multilateral and Bilateral Agencies, Education and TVET Specific Taxation, Skill Loans, Crowdfunding Platforms. The report includes findings of an in-house research and directions on diverse financing models, public-private partnerships, and policy recommendations that can drive India’s journey towards becoming a global skills hub.
“As VET becomes increasingly vital for employment, productivity, and international competitiveness, the need for identifying and implementing reforms in TVET funding is imperative,” says the report while emphasizing the architectural changes to make it more mainstream and integrated.
Schools of Vocational Studies, Technical and Advisory Assistance, Internationalization of Indian TVET Offerings, Training of Trainers and Assessors, Skill Universities and Pathways to Formal Education, Integration of Technology in Training, Funding Reskilling and Upskilling Programs, Funding New-Age Courses and Adoption of Global Models are some of the ways report looks at it.
Highlighting challenges spanning across urban and rural landscapes, traditional and emerging sectors, and varied demographics, the report authors say, “we find the potential for innovation and growth.’
India will be a talent powerhouse and the largest contributor to the global workforce if financing in TVET is supported by multitude of stakeholders which include the Government, private players, multilateral organizations, philanthropists etc. According to the India Skill Report 2022, employability has improved from 33 percent in 2014 to 45.97 percent in 2022. Yet, more than half of the working population is still unemployable. To support the ever-changing requirements of the skilling ecosystem, there is a need to develop new and innovative instruments of financing, the report emphasizes.
