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The World Bank FOR OFFICIAL USE ONLY A IN
Public Disclosure Authorized
Document o f
The World Bank
FOR OFFICIAL USE ONLY
Public Disclosure Authorized
Report No: 39697-IN
PROJECT APPRAISAL DOCUMENT
ON A
Public Disclosure Authorized
PROPOSED CREDIT
INTHE AMOUNT OF SDR 185.1 MILLION
(US$280 MILLION EQUIVALENT)
TO THE
REPUBLIC OF INDIA
FOR A
VOCATIONAL TRAINING IMPROVEMENT PROJECT
Public Disclosure Authorized
May 9,2007
Human Development Sector Unit
India Country Management Unit
South Asia Region
This document has a restricted distribution and may be used by recipients only in the
performance o f their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
CURRENCY EQUIVALENTS
(Exchange Rate Effective April 30,2007)
Currency Unit = Indian Rupee (INR)
INR43.01 = US$1
US$1.51326 = S D R 1
FISCAL YEAR
April 1 March31
ABBREVIATIONS AND ACRONYMS
AG
AH1
ASSOCHAM
AT1
ATI-EPI
BBBT
C&AG
CII
CN
COE
CPWD
css
CSTARI
CTI
CTS
cw
DC
DDO
DEA
DGE&T
DGS&D
DMF
DVT
EA
EAP
EDUSAT
EMF
FICCI
FMM
FTI
GFR
Go1
GPN
HTW
ICB
IDA
IDP
IFB
Accountant General in States
Apex Hi-Tech Institute, Bangalore
Associated Chambers o f Commerce and Industry o f India
Advanced Training Institute
Advanced Training Institute for Electronic and Process Instrumentation
Broad Based Basic Training
Comptroller and Auditor General o f India
Confederation o f Indian Industry
Consignment Note
Centre o f Excellence
Central Public Works Department
Centrally Sponsored Scheme
Central Staff Training and Research Institute
Central Training Institute
Craftsmen Training Scheme
Civil Works
Direct Contracting
Drawing and DisbursingOfficer
Department o f Economic Affairs
Directorate General o f Employment & Training
Directorate General o f Supplies & Disposals
Disclosure Management Framework
Directorate responsible for Vocational Training
Environment Assessment
Equity Assurance Plan
Educational Satellite
Environment Management Framework
Federation o f Indian Chamber o f Commerce and Industry
Financial Management Manual
Foremen Training Institute
General Financial Rules
Government o f India
General Procurement Notice
Hi-tech Training Wing
International Competitive Bidding
International Development Association
Institutional Development Plan
Invitation for Bid
i
FOR OFFICIAL USE ONLY
IFD
IIT
IMC
IMP
INR
ITB
ITC
IT1
ITN
ITW
IUFR
LIB
LO1
LPP
LR
M&E
MES
MIS
MHRD
MoLE
MoF
MoU
NCB
NCVT
NIMI
NIOS
NLI
NPC
NPD
NPIU
NSC
NVTI
NVQF
OBC
PA0
PLA
PIP
PMU
PRI
PWD
QCBS
RBI (CAS)
RFP
ROR
RR
RVTI
SBD
sc
SCVT
SIL
SPD
Integrated Finance Division o f M o L E
Indian Institute o f Technology
Institute Management Committee
Instructional Media Package
Indian Rupee
Instruction to Bidders
Industrial Training Center
Industrial Training Institute
Instructor Training Network
Instructor Training Wing
Interim Unaudited Financial Report
Limited International Bidding
Letter o f Invitation
Last Purchase Price
Learning Resource
Monitoring and Evaluation
Modular Employable Skills program o f the Go1
Management Information System
Ministry o f Human Resources Development
Ministry o f Labor & Employment
Ministry o f Finance
Memorandum o f Understanding
National Competitive Bidding
National Council for Vocational Training
National Instructional Media Institute at Chennai
National Institute o f Open Schooling
W Gin National Labour Institute at Noida
National Project Coordinator
National Project Director
National Project Implementation Unit
National Steering Committee
National Vocational Training Institute for Women
National Vocational Qualifications Framework
Other Backward Castes
Principal Accounts Office, M o L E
Personal Ledger Account
Project Implementation Plan
Project Management Unit
Panchayati Raj Institution
Public Works Department
Quality and Cost Based Selection
Reserve Bank o f India (Central Accounting Section)
Retroactive Financing Period
Rate o f Return
Railway Receipt
Regional Vocational Training Institute
Standard Bidding Document
Scheduled Caste
State Council for Vocational Training
Sector Investment Loan
State Project Director
..
11
This document has a restricted distribution and may be used by recipients only in the performance o f
their official duties. I t s contents mav not be otherwise disclosed without W o r l d Bank authorization.
SPIU
ST
TCPC
TCPO
TOR
uc
UNDB
UT
VET
VTIP
WBR No.
State Project Implementation Unit
Scheduled Tribe
Training, Counseling and Placement Cell
Training, Counseling and Placement Officer
Terms o f Reference
Utilization Certificate
United Nations Development Business
Union Territory
Vocational Education and Training
Vocational Training Improvement Project
World Bank Reference Number
Praful C. Pate1
Isabel M. Guerrero
Fayez S. Omar
Michelle Riboud
Nalin Jena/Hong W. Tan
Vice President:
Country Director:
Senior Manager, India Program:
Sector Manager:
Task Team Leader:
...
111
INDIA
India Vocational Training Project
CONTENTS
Page
.
STRATEGIC CONTEXT AND RATIONALE
I
.................................................................
1
A . Country and sector issues....................................................................................................
B. Rationale for Bank involvement .........................................................................................
2
C . Higher level objectives to which the project contributes ....................................................
2
.
PROJECT DESCRIPTION
I1
.............................................................................................
A . Lending instrument .............................................................................................................
B.
Project development objective and key indicators..............................................................
1
2
2
3
C. Project components ............................................................................................................. 3
D. Lessons learned and reflected in the project design ............................................................
6
E. Alternatives considered and reasons for rejection ..............................................................
7
......................................................................................................
8
A . Institutional and implementation arrangements ..................................................................
8
B. Monitoring and evaluation o f outcomes/results ..................................................................
9
C . Sustainability .......................................................................................................................
9
D. Critical risks and possible controversial aspects.................................................................
9
E. Credit conditions and covenants .......................................................................................
11
.
.............................................................................................
12
A . Economic and financial analyses ......................................................................................
12
B. Technical ...........................................................................................................................
13
C . Fiduciary ...........................................................................................................................
14
D. Social .................................................................................................................................
15
.
I11
IMPLEMENTATION
. . .
IV
APPRAISAL SUMMARY
E.
Environment ...................................................................................................................... 16
F.
Safeguard policies .............................................................................................................
17
G. Policy exceptions and readiness. .......................................................................................
17
iv
.........................................................
Annex 1: Country and Sector o r Program Background
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
.................23
........................................................................
Annex 4: Detailed Project Description......................................................................................
Annex 5: Project Costs ...............................................................................................................
Annex 6: ImplementationArrangements .................................................................................
Annex 3: Results Framework and Monitoring
.....................................
Annex 8: Procurement Arrangements......................................................................................
Annex 9: Economic and FinancialAnalysis .............................................................................
Annex 10: Safeguard Policy Issues............................................................................................
Annex 11: Project Preparation and Supervision .....................................................................
Annex 12: Documents in the Project File .................................................................................
Annex 13: Statement of Loans and Credits..............................................................................
Annex 14: Country at a Glance .................................................................................................
Annex 7: FinancialManagement and Disbursement Arrangements
V
18
24
31
41
42
53
60
67
79
85
86
88
92
INDIA
VOCATIONAL TRAINING IMPROVEMENT PROJECT
PROJECT APPRAISAL DOCUMENT
SOUTH ASIA
SASHD
Date: M a y 9,2007
Country Director Isabel M. Guererro
Sector Managermirector: Michelle h b o u d J u l i a n F.
Schweitzer
Project ID: PO99047
Lending Instrument: Specific Investment Loan
t
[ ] Grant
[ ] Guarantee
Team Leader: Nalin Jena/Hong W. Tan
Sectors: Vocational training (100 percent)
Themes: Education for the knowledge economy (P);
Other human development (S)
Environmental screening category: Partial Assessment
[ ] Other:
For Loans/Credits/Others:
Total Bank financing (US$ million): 280.00
Recipient:
Government of India, Department o f Economic Affairs
Ministry of Finance
North Block, New Delh
India- 110001
Tel: 91-11-23094140 Fax: 91-1 1-2309251U23092477
Responsible Agency:
Government of India, Directorate General o f Employment and Training, Ministry o f Labor and Employment,
Shram Shakti Bhawan
Rafi Marg
New Delhi
India- 110001
Tel: 91-11-23710446 Fax: 91-11-23351878
Does the project depart from the CAS in content or other significant respects? Re$ PAD I.C
Does the project require any exceptions from Bank policies?
Re$ PAD I K G
Have these been approved by Bank management?
I s approval for any policy exception sought from the Board?
Does the project include any critical r i s k s rated “substantial” or “high”?
Re$ PAD III.D
Does the project meet the Regional criteria for readiness for implementation? Re$ PAD
[ ]Yes [XINO
[ ]Yes [XINO
[ ]Yes [ IN0
[ ]Yes [XINO
[XIYes [ ] N o
Project development objective Re$ PAD II.B, Technical Annex 3
The objective i s to improve the employment outcomes o f graduates f i o m the vocational training system, by making
the design and delivery o f training more demand responsive.
Project description [one-sentence summary of each component] Re$ PAD II.C, Technical Annex 4
Component 1: Improving Quality o f Vocational Training -This component focuses on: (a) improving quality and
relevance o f training imparted in 400 eligible Industrial Training Institutes (ITIs) selected competitively from
eligible StatesNTs, (b) upgrading training o f IT1instructors, and (c) providing incentive funds to States to reward
good performance in project implementation.
Component 2: Promoting Systemic Reforms and Innovations -This component focuses on activities that lead to
enhancement in the overall reach and effectiveness o f the vocational training system in the medium-term.
Implementation o f activities under this component will be the responsibility o f the Directorate General o f
Employment and Training @GE&T), discharged in collaboration with States, industry associations and private
training providers, as necessary.
Component 3: Project Management, Monitoring and Evaluation - Support will be provided to: (a) establishment o f
project management and implementation structures at the national and State levels, (b) improvements in system
management and implementation o f reforms through training o f policy planners, managers and administrators, (c)
project monitoring and dissemination o f information with the help o f a computer-based management information
system, and (d) project evaluation and, policy and system research studies at the national and State levels.
Which safeguard policies are triggered, if any? Re$ PAD I K F , Technical Annex 10
Environmental Assessment and Indigenous People
Significant, non-standard conditions, if any, for:
Re$ PAD I I I . E
Board presentation:
NIA
b
Credit effectiveness:
NIA
Covenants applicable to project implementation:
T h e Government o f India (GoI), through Ministry o f Labor & Employment (MoLE), shall carry out i t s Parts o f
the Project in accordance with the Project Implementation Plan (PIP) including the Environmental
Management Framework (EMF) and the Equity Assurance Plan (EAP).
The GoI, through the MoLE, shall establish and maintain throughout the period o f Project implementation, the
National Steering Committee and the National Project Implementation Unit (NPIU) along with the
Procurement Unit, the Finance Unit, the Institutional Development Unit, the Academic and Training Unit, the
Monitoring and Evaluation Unit and the Policy Development Unit, all in form and with functions, resources
and staffing satisfactory to the Association and as set out in the PIP.
T h e GoI, through the DGE&T within the MoLE, shall enter into grant agreements with each awardee
satisfactory to the Association for implementation o f Part 2.2 (Innovation Fund) o f the Project.
The GoI, through the M o L E and in accordance with the PIP, shall: (a) cause each Project State participating in
the Project to execute a Memorandum o f Understanding (MoU) with Addendum with each Project State ;(b)
cause each Participating State t o carry out i t s activities under the Project in accordance with i t s respective
M o U and the Addendum; (c) cause each Participating State to maintain throughout the period o f Project
implementation the State Project Implementation Unit (SPIU), the State Steering Committee (SSC), the State
Council o f Vocational Training (SCVT), all in accordance with the M o U and in a form and with functions,
staffing and resources satisfactory to the Association; and (d) cause each Participating State to: (A) select
Industrial Training Institutes (ITIs) in accordance with the eligibility criteria contained in the PIP; and (B)
cause Project I T I s within such state to carry out their respective activities under the Project in accordance with
the PIP and the respective M o U and the Addendum; all in a manner satisfactory to the Association.
The GoI, through the MoLE, shall: (a) establish by July 3 1,2008 and thereafter maintain throughout the period
o f project Implementation, a monitoring and evaluation system; and (b) monitor and evaluate implementation
o f the Project at the national and state level with such system in accordance with PIP.
The GoI, through the MoLE, shall: (a) by April 30 and October 30 o f each fiscal year provide Project Reports to
the Association; and (b) by M a y 3 1 and November 30 o f each fiscal year review the implementation o f the
Project with the Association; all in a manner satisfactory to the Association and as set forth in the PIP.
The GoI, through the MoLE, shall and shall cause the Participating States and Project ITIs, to maintain financial
management systems and to carry out the audits in a timely manner and in accordance with terms o f reference
set out in the Financial Management Manual (FMM).
The GoI, through the MoLE, shall and shall cause the Participating States and Project ITIs, to carry out all
procurement under the Project in accordance with the World Bank’s Procurement Guidelines and Consultant
Guidelines and the Procurement Manual.
The GoI, through the MoLE, shall provide adequate financial and administrative powers to the National Project
Coordinator (NPC) in the NPIU to enable such coordinator to facilitate implementation o f the Project.
The GoI, through the MoLE, shall and shall cause the Participating States to implement the Disclosure
Management Framework (DMF) throughout the duration o f the Project, refrain from taking any action which
shall prevent or interfere with the implementation o f the DMF, not waive, amend or abrogate this Framework
and, provide a written report on progress achieved in the implementation o f the Framework semi-annually.
C
I. STRATEGIC CONTEXT AND RATIONALE
A. Country and sector issues
1. India i s a fast growing economy with a rising demand for skilled workers. A skilled workforce
enhances the efficiency and flexibility o f the labor market, reduces skills bottlenecks, and enhances
mobility and productivity. One o f the key suppliers o f such workers i s the vocational education and
training (VET) system. A major component o f the VET system i s the Craftsmen Training Scheme (CTS)
run under the auspices o f the Ministry o f Labor and Employment (MoLE) and the National Council for
Vocational Training (NCVT) at the national level, and the State Departments dealing with vocational
training and the State Council for Vocational Training (SCVT) at the State level.
2. The CTS, with 741,000 student places in 51 14 institutions, operates through two types o f institutions:
(a) Industrial Training Institutes (ITIs) - financed and managed by State Departments dealing with
vocational training and providing places for about 400,000 students in 1,896 institutes; and (b) Industrial
Training Centers (ITCs) - owned, financed and managed by private organizations or NGOs and providing
places for about 34 1,000 students in 3,218 centers.
3. However, graduates from the CTS system face l o w labor market outcomes. The Baseline Tracer
Study (2006) conducted by the World Bank shows that less than 30 percent o f graduates from I T I s find
employment upon graduation and employers feel that the lack o f appropriate technical skills (and
corresponding “soft” skills -such as teamwork, innovativeness) o f these graduates makes them difficult t o
employ. T h e employers believe that with the possession o f these skills, the graduates will become more
marketable.
4. Recent analysis conducted by the Government o f India (GoI) and the World Bank has attempted to
identify constraints to improving the quality o f vocational training. Key challenges identified include:
Lack of information on training - A preoccupation with providing and financing training has resulted
in the governments neglecting their key role o f providing information about the availability and
effectiveness o f training programs.
Nascent involvement of industry in the vocational training system - Until recently, there was limited
participation o f employers in defining training policies and developing trade courses. T h i s i s n o w
changing, and industry associations and individual employers are showing considerable interest in
involving themselves in developing and managing ITIs.
Lack of incentives to improve pegormance at the institutional level - Institutional management has
l i t t l e freedom to fill student places to capacity, replace trade courses with new ones, and ensure that
students receive quality training.
5. Addressing these challenges i s a long-term agenda. Recognizing that the system i s outdated, the Go1
i s keen to undertake reforms to move towards a system where the Central and State governments play a
key role in policy development, standards setting, financing, and monitoring and evaluation, while
engendering greater competitiveness and accountability by institutions.
6. A key ingredient o f the reform agenda i s moving the private sector into a lead role at all levels of
decision making - from policymaking at the national and State levels to managing institutions. The
M o L E i s working closely with the private sector to transfer this vision into reality. At the administrative
level, employers are being given greater representation in the N C V T and the SCVTs. At the institutional
level, Institute Management Committees (IMCs) have been introduced to involve employers in
overseeing IT1 operations. IMCs are being actively supported by the Confederation o f Indian Industry
1
(CII), the Federation o f Indian Chamber o f Commerce and Industry (FICCI) and the Associated
Chambers o f Commerce and Industry (ASSOCHAM) - India’s largest employer federations, with each
I M C being chaired by a local industry representative. I M C s are being invested with decision malung
powers and significant financial autonomy.
7. Over the next few years, Go1 aims to use the I M C mechanism to upgrade 500 ITIs, including 100 ITIs
with domestic funds. The performance o f these institutions will be closely monitored and evaluated to
study the impact o f these reforms on labor market outcomes.
8. At the same time, Go1 i s focusing attention on systemic issues, through working on policy reforms
which are expected to lead to significant improvements in the quality o f the system in the medium-term.
B. Rationale for Bank involvement
9. The Bank has extensive international experience to draw on in this area. T h i s expertise will be used
support institutional development and provide technical assistance; (ii)
facilitate formulation o f
to: (i)
build the foundation for changing vocational training, with
policy reforms through this Project; and (iii)
involvement o f industry in the management o f ITIs, from a supply driven system to one driven by
demand from employers.
10. Furthermore, lessons from analytical and project work done by the Bank in India and other countries
support the reforms being proposed by GoI. Some key lessons are being implemented in this Project: (i)
the important role o f the Central and State governments in facilitating provision o f information o n
vocational training; (ii)fostering competition among I T I s and using incentives t o induce better
performance from States; and (iii)refocusing the role o f Central and State governments on selective
financing, regulating and monitoring o f vocational training.
C. Higher level objectives to which the project contributes
11. The Project contributes to India’s long-term objective o f human capital development for sustaining
economic growth and poverty reduction. The Project will also contribute to learning through evaluating
the implementation o f innovative public-private partnerships in the delivery o f vocational training. The
proposed project i s well aligned with the World Bank Group India Country Assistance Strategy (Report
No. 29374) which seeks to provide significant support for improving the performance and reach o f India’s
vocational training system, to ensure that the trainees coming out o f the system are able to compete in an
increasingly globalized economy.
11. PROJECT DESCRIPTION
A. Lending instrument
12. The proposed instrument i s a Sector Investment Loan (SIL) financed through an IDA credit to the
Go1 to finance IT1 upgradation, capacity building and policy development. Seventy five (75) percent o f
the resources will be provided by the Go1 through Bank financing while 25 percent o f the resources will
be provided by the Project States from their own resources.’ For the North-Eastern states and Sikkim, the
financing ratio would be 90: 10.
’
Strictly speaking, while the Go1 will be funding 75% o f the project expenditure (cost) in States, it w o u l d actually
b e meeting about 78% o f the total project cost, taking into account its own expenditure o n the National Project
Implementation Unit (NPIU) and the c e n t r a l l y - h d e d institutions.
2
B. Project development objective and key indicators
13. T h e Project development objective i s to improve the employment outcomes o f graduates from the
vocational training system, by making the design and delivery o f training more demand responsive.
14. This will be measured by the following three key performance indicators (KPIs):
(i)
(ii)
Improved internal efficiency o f the project ITIs:
0
20 percent increase over 5 years (to 73 percent) in the proportion o f pass-outs from project
I T I s that exit f i o m the CTS system with an NCVT certificate, from a baseline o f 61 percent;
Improved external efficiency o f the project ITIs:
56 percent increase over 5 years (to 50 percent) in the proportion o f project ITIs’ pass-outs
who find employment within one year o f finishing training, from a baseline o f 32 percent;
25 percent increase over 5 years (to INR 3,206) in the real monthly earnings o f employed
pass-outs from project I T I s measured one year after graduation, as compared to the 2006
baseline o f 2,42 1 INR.
Other intermediate outputs that affect the K P I s will also be monitored, including:
total number o f new entrants benefiting directly f i o m the project;
0
reduction in the time taken for pass-outs from project ITIs to find employment after
completing training, as compared to the baseline;
0
number o f instructors trained by category o f training (basic, refresher and advanced); and
number o f policy studies commissioned and their policy recommendations formulated.
C. Project components
15. T o make the CTS responsive to current and emerging labor market requirements for highly skilled
manpower, the Go1 plans to implement the Vocational Training Improvement Project (VTIP), as a
centrally-sponsored multi-State project, and: (a) upgrade 500 ITIs (including 100 domestically funded
I T I s ) with active managerial participation from industry, (b) enhance curriculum and instructor training
capacity, (c) promote innovations in the delivery o f both formal and informal training, (d) develop policylevel reforms; and (e) monitor and evaluate interventions.
16. Competitive funding and incentives will be used as the primary strategy to encourage States to
implement reforms in their vocational training sub-systems. Only States willing to undertake
administrative and financial reforms will be eligible for financial support under the Project. ITIs will be
selected and funded on the merits o f their Institutional Development Plans (IDPs). Improvements in
system management and implementation o f reforms will be supported through capacity building o f policy
planners, managers and administrators, and commissioning research studies. The establishment o f project
management structures at the national and State levels will ensure effective implementation and project
monitoring.
17. The Project would fund various activities detailed in Annex 4 and the GoI’s Project Implementation
Plan (PIP) according to the prescribed guidelines, including civil works, goods (equipment, books &
learning resources, software and furniture); consultant services; training and study tours and workshops;
and incremental operating costs (including salaries o f additional full-time instructors and project staff).
18. Go1 has already funded the first set o f 100 o f the 500 ITIs through i t s own resources and i s now
seeking Bank assistance to upgrade the remaining 400. Go1 intends to finance ITIs through a cost sharing
3
arrangement o f 75 percent from the Central Government (financed by the Bank credit) and 25 percent
from the States (see footnote 1 above). For the North-Eastern states and Sikkim, the financing ratio
would be 90: 10.
19. The Project has three components: (a) improving quality o f vocational training, (b) promoting
systemic reforms and innovations, and (c) project management, monitoring and evaluation. These are
briefly described below:
Component 1: Improving Quality of Vocational Training [Total: US$301 million, I D A : US$228
million]
20. This component focuses on: (a) improving quality and relevance o f training imparted in 400 eligible
I T I s selected competitively from eligible States/UTs, (b) upgrading training o f IT1 instructors, and (c)
providing incentive funds to States to reward good performance in project implementation.
21. The Project will support strengthening o f 400 I T I s to provide quality vocational training through
establishment o f Centers o f Excellence (COE) in about 300 I T I s and upgradation o f training facilities in
about 100 I T I s . Eligible expenditures from the 100 eligible I T I s that have already joined the Project from
August 2006 will be funded retroactively.’
22. To provide a level playing field, all the eligble I T I s (from the national stock o f 1896 ITIs) will be
trained by master trainers in development o f quality IDPs. The I T I s interested in participating in the
Project will develop IDPs under the overall guidance o f their respective IMCs and through consultation
with the stakeholders (local representatives o f industry associations, faculty members, students and the
community). Each I D P would define the long-term goals o f the institution, the issues and challenges
facing the institution and the strategies for dealing with them. Each I D P will set targets for institutional
improvement, define performance indicators, explain how each IT1 i s going to assist graduates in
obtaining employment (through a placement cell or j o b fairs) and detail the annual financial requirements.
23. The selection o f all the remaining 300 I T I s will be carried out in a maximum o f 2 selection cycles o n
the basis o f IDPs in a transparent manner. The evaluation process at the State level will take into account
issues including: the availability o f a h c t i o n i n g IMC for the entire institution; the extent to which the
IDP meet the needs o f the local economy; consideration given to gender, stakeholder participation, and
social equity issues; extent to which financing sought i s realistic and whether the institution has adequate
absorptive capacity; and whether the IDP proposes to leverage private sector financing to complement
public support. The final selections and fund allocations will be posted on the DGE&T website.
Unsuccessful I T I s will be provided advice on how to improve their proposals for submission in the
subsequent round o f competition. T h e selection decisions will be made well in advance o f the beginning
o f the academic year (August).
24. COEs will focus on individual industrial sectors that meet the requirements for high quality
craftsmen by the dominant local industry. These include sectors such as automotive, electrical and
electronics, garments and IT. This approach will provide multi-entry and multi-exit pathways for students
to get training. COEs will conduct broad-based multi-skillingcourses over two semesters during the firstyear, advanced modules during the first half o f the second-year and specialized module through industry
Eligible expenditures will be those that are made in accordance with the B a n k guidelines o n procurement o f works,
goods and services, financial management and safeguards. The total amount o f retroactive financing o f expenditure
by the Bank will not exceed 20 percent o f the total credit. Any expenditure in excess o f 20 percent o f the total credit
will have to b e borne by the GoI/States. Eligible expenditures will be borne up t o a maximum o f 12 months p r i o r t o
the expected date o f Financing Agreement Signing.
4
attachment during the second h a l f o f the second-year. The ITIs that opt to establish a COE will also be
financed to upgrade trades normally which are related to the industrial sector covered by the COE. Any
request for additionalhew industrial sectors to be upgraded will need to be justified and will be subject to
the availability o f funds.
25. ITIs not wishing to go the COE route may opt to upgrade training facilities for the conventional trades
that are in high demand locally. New trades may be introduced in these ITIs only if l o w demand trade
courses are closed down. Financing o f these ITIs will normally be for 6 trades inclusive o f existing and
new trades.
26. All project ITIs will establish: (a) facilities for linking to a central Management Information System
(MIS) and keeping it periodically updated, and (b) a Training, Counseling and Placement Cell (TCPC) to
help i t s graduates get employment, and to also help i t s students secure training attachment in industries.
27. Enhancement in the system’s training capacity will be achieved through: (a) establishment o f 10
Instructor Training Wings (ITWs) in selected I T I s to provide an additional 1,000 places for the basic
training o f instructors, and to strengthen training facilities in seven centrally-funded institutions already
engaged in conducting this type o f training; (b) starting training for would-be instructors in COEs at 11
centrally-funded institutions; and (c) launching refresher courses for instructors in 20 selected COEs.
Highly specialized training o f instructors would also be provided in publicly-funded organizations outside
the ambit o f MOLE, privately-funded training organizations and industry training centers.
28. For bringmg about system-wide improvement in the quality o f teaching, instructors in all the I T I s
(including project I T I s ) in each project State will, during project life, be provided either basic training or
refresher training as per the individual instructor’s assessed training needs. T h e Project will finance all
such instructor training through the SPIUs.
29. The Apex Hi-tech Institute (AHI), an existing centrally-funded institution, will manage and promote
instructor training both within the network o f training institutions called the Instructor Training Network
(ITN) comprising 10 ITWs, 11 centrally-funded institutions, and 20 COEs - and outside the ITN. AH1
will be strengthened to perform this management function.
-
30. Additional finances will be made available as an incentive to well-performing States to support such
activities as: (a) organizing medium-term training programs in emerging and/or export oriented s h l l areas
and, short-term training programs for practicing artisans and unemployed youth in both project and nonproject I T I s ; (b) strengthening o f training facilities in non-project ITIs; (c) providing advanced training
for instructors in specialized institutions; and (d) translating instructional media packages into regional
languages.
Component 2:
million]
Promoting Systemic Reforms and Innovations [Total: US$30 million, I D A : US29
3 1. T h i s component focuses on activities that lead to enhancement in the overall reach and effectiveness
o f the vocational training system in the medium-term. Implementation o f activities under this component
will be the responsibility o f the DGE&T, discharged in collaboration with States, industry associations,
and private training providers, as necessary.
32. The Project will support studies and international and national consultations to: (a) set up a National
Vocational Qualification Framework (NVQF); (b) design a policy framework for registering private
training providers and the courses/programs offered by them that meet N V Q F set standards; (c) design
models for training o f the informal sector workforce; and (d) assess the feasibility o f establishing a
5
training fund for financing both formal training courses in publicly and privately-financed training
institutions, and training programs conducted by employers for both new and in-service workers. Other
analytical work identified during project implementation will also be supported by the Project.
33. Three centrally-funded institutions will be strengthened to enhance long-term sustainable
development o f vocational training through: (a) establishment o f mechanisms for periodically updating
curricula and learning resources for CTS trades and instructor training, (b) development o f sound
assessment and testing procedures for both students and instructors, and (c) setting student training
standards that match international benchmarks.
34. Innovative activities such as setting up a training fund, or using the internet (e.g. through the
Education Satellite (EDUSAT)) effectively for vocational training will be undertaken by the DGE&T,
States, centrally-funded institutions, employers’ associations, and private training providers. These
innovative interventions will be piloted to assess the impact/acceptability o f systemic reforms.
35. Finally, this component will also support the establishment o f mechanisms for periodically updating
the curricula and learning resources (e.g. materials and teachindlearning aids) o f NCVT-affiliated trades
and instructor training, in consultation with employers.
Component 3: Project Management, Monitoring and Evaluation [Total: US$28 million, IDA: US$23
million]
36. The Project will support: (a) establishment o f project management and implementation structures at
the national and State levels, (b) improvements in system management and implementation o f reforms
through training o f policy planners, managers and administrators, (c) project monitoring and
dissemination o f information with the help o f a computer-based management information system, and (d)
project evaluation and, policy and system research studies at the national and State levels.
D. Lessons learned and reflected in the project design
37. The project design reflects key lessons learned from experience o f implementing vocational training
projects worldwide, including:
38. Ensure strongpolitical commitment to reforms. The experience o f countries around the world shows
that a strong political will t o reform - the presence o f which i s perhaps neither dependent o n a country’s
wealth, nor on its level o f institutional advancement i s the most important prerequisite for successful
efforts to restructure VET systems. This Project has been developed in response to the Government’s
clear commitment to reforming the system and making it more demand-driven and responsive to the
needs o f employers.
-
39. Strengthen linkages with the labor market. Promoting linkages between the VET system and the
labor market requires the governments to examine their own internal structures and operations. One way
t o build the linkages i s to develop strong ties with employers at the institutional level and making
operations more flexible by giving managers authority (and accountability) to respond t o dynamic
changes in the labor market. The Project supports implementation o f reforms aimed at making employerled IMCs responsible for managing the institutions and vesting institutional managers with authority to
make decisions.
40. Ensure that there is greater decentralization to states/institutions regarding decision making. T h i s
was one o f the key lessons o f the Bank’s Vocational Training Project which ended in 1998. The proposed
6
project i s providing significant administrative and financial autonomy to institutions, in collaboration with
the private sector, to decide on the trades they want to upgrade, procure goods and services and engage
contract faculty. Central control over these activities will be negligible.
41. Promote the Government2 role in disseminating information on VET. A preoccupation with
providing, regulating, or financing VET can result in governments neglecting their roles as provider or
facilitator o f information on the availability and effectiveness o f vocational programs. An expansion o f
this role may be one o f the most effective ways for governments to foster the development o f a relevant
and cost-effective vocational education and training system. Information on trainee placement rates, costs
o f training at different institutions, unemployment rates by s k i l l levels, vacancy rates and returns to
different levels o f training should be gathered through labor force surveys and tracer studies, analyzed and
disseminated widely by the governments. Better information on training programs helps policy makers
redesign policies and interventions, and wider access to information o n availability and quality o f training
supply can protect prospective trainees against unfair trade practices. T h i s role has been overlooked or
under-emphasized in India. T h e Project supports development o f a strong monitoring and evaluation
system, where information on institutions i s widely disseminated and used by policymakers to improve
project design.
42. Diversifi the sources offinancing of VET. A financing policy for training should ensure both the
stability o f funding for sustainable policy implementation and the level o f financing needed to improve
training outcomes. The claim on public resources for vocational training i s much less strong than that for
primary and general secondary education. A f i r s t objective, then, i s to solicit and increase the
contributions from those that benefit the most - employers and trainees. In some countries, governments
bear the major share o f costs and have explored cost recovery from trainees. In others, income from the
sale o f products and training services also provide an important source o f revenue to training institutions.
The Project supports the implementation o f these options by ITIs. Similarly, the Project will explore the
use o f training funds to raise resources from the governments, students and the private sector and allocate
it to institutions competitively.
43. Ensure that laws promote private sector participation in vocational training. Experience shows that
removing ambiguity regarding the setting-up o f training institutions results in a vigorous response,
especially for post secondary training programs. The experience o f many successful countries shows that
when private providers are not discouraged by overly stringent laws, rapid industrial growth can lead to a
strong private supply o f technical training. A key aim o f the Project i s to develop such policies which
will allow the private providers to compete on a level-playing field.
E. Alternatives considered and reasons for rejection
44. Several alternative approaches were considered:
45. Upgrading only one industrial sector within ITIs toform a COE. The first batch o f 100 ITIs currently
under upgradation using Go1 resources has adopted the COE approach. While this approach has some
advantages, a key concern i s that the benefits from upgradation may not necessarily trickle down to the
rest o f the institution. For the I T I s to be supported by the Project, the choice i s being l e f t to each IMC to
decide on how they want to improve their institution, be that by establishing a single-industrial sector
COE or upgrading different trades in the institution. Those opting for the COE approach have to clearly
demonstrate, through their IDPs, how the benefits from the COE will accrue to the whole institution.
46. Upgrading 'women only 'ITIs. One o f the options proposed was to upgrade about 100 ITIs that cater
only to women. However, many States and the private sector felt that this approach would lead to
7
segmentation. The Project attempts to emphasize full integration o f women into the labor market, rather
than forcing them to acquire s k d l s in a limited number o f trades that are offered by ‘women only’ ITIs.
For this reason, supporting ‘women only’ ITIs was not considered appropriate. As a part o f project
design, women-only ITIs will have to compete with other institutions for resources.
47. Focus only on upgrading ITIs. Upgrading ITIs and making them more relevant to market needs i s
undoubtedly an important short-term objective in reforming the vocational training system. However,
achieving only that goal stops well short o f the GoI’s long term objective o f reforming the overall
vocational training system. The Project supports the GoI’s larger reform agenda by developing and
piloting policies and interventions (e.g. training for the informal sector, framework for private providers,
curriculum reform, etc.) that will lead to a more effective vocational training system.
48. Providing resources to upgrade institutions as they are currently managed. This option was rejected
based on the lessons o f international experience. Experience suggests that a focus on upgrading
institutions without accompanying policy changes - for example, creating private sector-led IMCs, or
giving institutions greater administrative and financial autonomy - i s unlikely to have long-term positive
impact on the labor market outcomes o f interest.
111. IMPLEMENTATION
A. Institutional and implementation arrangements
49. At the national level, the Project will be guided by a National Steering Committee (NSC), with
significant senior-level representation from industry and industry associations. The NSC, chaired by the
Secretary MoLE, will select States and institutions for financial support, and allocate funds to the
DGE&T, States, training institutions and others for various activities.
50. At the national-level, the overall responsibility for policy decisions and project management will be
vested in the National Project Director (NPD) - an official in the rank o f a Joint Secretary in the M o L E who will head a National Project Implementation Unit (NPIU). The NPIU will have 5 functional units
with adequate full-time officials, consultants and staff. I t will be granted functional financial and
administrative autonomies sufficient to carry out i t s functions without having t o seek frequent approvals
from the NPD.
51. At the State level, the Project will be guided and facilitated by a State Steering Committee (SSC),
headed by the Principal Secretary/ Secretary for vocational training. The SSC will have significant
representation from industry and industry associations. The SSC will be assisted by a State Project
Implementation Unit (SPIU) with adequate full-time officials, consultants and support staff.
52. At the institutional level, each participating IT1will have an Institute Management Committees (IMC)
for the whole IT1with significant participation o f industry. I t will be chaired by an industrialist from the
local area. T h i s will enhance involvement o f industry in all aspects o f training, and ensure that all training
courses are fully demand driven. T h e IMCs will be empowered in academic, administrative, financial and
management matters to discharge their functions as set out in the M o U signed between M o L E and the
States.
8
B. Monitoring and evaluation of outcomesh-esults
53. Monitoring activities would include ongoing, systematic collection, processing and dissemination o f
data at the State and national levels, updating the K e y Performance Indicators (KPIs), and taking
corrective measures as needed. SPIUs will undertake at least two visits per year to each Project ITI,
assess project implementation progress against a checklist and regularly update the Management
Information System (MIS) covering all ITIs in the State. T h i s information would be collated by the NPIU
into a Master M I S for the country as a whole and this information will be disseminated widely. The NPIU
will collate these monitoring reports and prepare semi-annual monitoring reports for use during Joint
Review Missions (JRMs).
54. Project evaluation will be conducted twice during the project life. The NPIU will be responsible for
developing the Terms o f Reference for this activity, sharing the same with the Bank, contracting an
external agency t o undertake this task and supervising that work. In addition, the NPIU will commission
thematic reviewskudies during the course o f the Project.
55. At the national level, project implementation will be reviewed periodically by the NSC, and at the
State-level, the SSCs will perform a similar function. Implementation progress will also be reviewed biannually (twice a year), at the mid-term and at the end o f Project, jointly by Go1 and IDA. Data f r o m the
MIS, monitoring reports and evaluation studies will constitute important components o f these joint semiannual, mid-term and end-term JRMs.
C. Sustainability
56. The key sustainability issue i s t o ensure that the reforms introduced by the Project at the national,
State and institutional levels are sustained and deepened, and that these improvements are extended
eventually to both publicly and privately funded training institutions not covered under this Project. This
will require that: (a) reforms are owned and effectively implemented by States, IMCs and institutions; (b)
IMCs and institutions develop the capacity and confidence to exercise their academic, managerial,
administrative and financial autonomies, with accountability, t o respond and adapt rapidly t o changing
labor market conditions; and (c) the changes introduced in the system management at the State and
national levels become internalized and ingrained-the success o f this will depend to a large extent on
how the processes for competitive institutional selection and funding o f several Project elements are
administered. It i s expected that these changes will lead t o a more demand-driven system, and significant
emphasis will be placed o n reviewing progress along these dimensions during the monitoring and
evaluation process.
D. Critical risks and possible controversial aspects
Risks
Mitigation
Risk
Rating
undertaking to implement reforms and comply with the fiduciary
requirements will be eligible to j o i n the Project.
The Project supports development o f a training regulatory
fkamework and establishment o f a training fund that should ease
private sector entry into training markets and competition for public
9
M
Risks
Mitigation
ITIs that are not selected
have n o incentives t o
perform.
0
The reforms are not
financially sustainable
once the Project i s over.
A fully competitive
process i s not followed in
selection o f I T I s
resources.
The process o f competitive funding will motivate ITIs to set up
I M C s and become more responsive t o the labor market, even among
non-project I T I s .
The Project provides for training o f instructors from all I T I s
including those not selected for participation in the Project.
Non-project I T I s could also benefit from additional funding that
well-performing States could receive under the Incentive Fund.
Management and financial reforms put in place are likely t o lead to
increased cost-sharing with employers and students in the mediumterm, and induce the Central and State governments to sustain
reforms over the longer run.
All I T I s in States will b e trained in developing quality IDPs.
State Steering Committees (SSCs) will justify their decisions, and
post minutes and successful IDPs o n the SPIU websites to ensure
transparency.
0
SSCs will also provide comments on h o w unsuccessful I T I s can
improve their IDPs for future competition.
Slow implementation due 0 Experience acquired from other Bank projects (TechEd and
to multi-State nature o f
Technical Education Quality Improvement Project (TEQIP)) will
help States handle Bank procurement and financial management
the Project
procedures, and keep project implementation on schedule.
Frequent technical assistance provided to States through v i s i t s o f
NPIU and Bank team and guidance provided during Joint Review
Missions will also help in timely implementation by the ITIs.
Poorly performing States
Three hundred I T I s will be selected in a maximum o f two cycles. In
the second cycle, performance o f Participating States in the past year
continue t o get resources
will be used as criterion for selection o f I T I s from that particular
state.
Furthermore, Incentive Fund will not b e accessible to States and
institutions that do not show improvements in performance.
Component 2: Policy Reform, Support for Innovations and Management
Policy reform studies and 0 Go1 i s commited t o reforms o f the vocational training system.
pilots are not undertaken
Proposed studies were identified after discussions with GoI, and they
are being designed in collaboration with MOLEand the private
sector.
Innovations Fund i s not
Proposals for assistance from this Fund will be shared with the Bank
accessed in a transparent
before these are considered by the NSC.
0
The N S C will justify i t s decisions and post its minutes o n the
manner
DGE&T website t o ensure transparency. The chosen proposals will
also be posted on the DGE&T website.
MI,CSTARI, NIMI and 0 NPIU and Bank team will initially provide technical asssitance t o
these institutions t o develop and detail their project plans with
other centrally funded
institutions are not able to
realistic time frames
perform their roles
These institutions will later be closely monitored by both the NPIU
and Bank team for timely and effective implementation o f their
effectively
0
10
Risk
Rating
S
M
M
S
M
S
M
M
Risks
Mitigation
Component 3:Project Man1 rement, Monitoring and Evaluation
0
NPIU i s not kept
DGE&T recognizes the importance o f having a full-time NPIU in
place and empowered throughout the duration o f the project and
adequately staffed and
empowered at all times
remains commited to doing so.
throughout the Proiect life
0
Financial Management:
Simplification o f mechanism for release o f funds,
0
There are likely to be
Intensive training o f staff at all levels,
0
delay in funds flow,
Follow-up on audit & scheme specific audit certificate, and
Enhancement in delegation levels.
variation in staff
0
capacities, delay in
submission o f audit
reports and low
delegation o f financial
powers
0
Considerable attention has been paid to measuring
Project outcomes may be
- project
- - outcomes,
difficult to measure
including (a) devising a rigorous-monitoring and evaluation
framework, (b) designing surveys for ITIs and their graduates, and
(c) piloting and fielding these baseline surveys.
0
These surveys, when continued and integrated into the Project MIS,
should provide the information base required to monitor and
rigorously evaluate the effects o f the Project.
Overall Risk Rating
Risk Rating - H (Hig Risk), S - (Substantial Risk), M - (Moderate Risk), N- (Negligible Risk)
Risk
S
S
M
M
E. Credit conditions and covenants
57. Covenants applicable to project implementation:
0
The Government o f India (GoI), through Ministry o f Labor & Employment (MoLE), shall carry
out i t s Parts o f the Project in accordance with the Project Implementation Plan (PIP) includingthe
Environmental Management Framework (EMF) and the Equity Assurance Plan (EAP).
0
T h e GoI, through the MoLE, shall establish and maintain throughout the period o f Project
0
0
implementation, the National Steering Committee and the National Project Implementation Unit
("IU) along with the Procurement Unit, the Finance Unit, the Institutional Development Unit,
the Academic and Training Unit, the Monitoring and Evaluation Unit and the Policy
Development Unit, all in form and with functions, resources and staffing satisfactory to the
Association and as set out in the PIP.
The GoI, through the DGE&T within the MoLE, shall enter into grant agreements with each
awardee satisfactory to the Association for implementation o f Part 2.2 (Innovation Fund) o f the
Project .
The GoI, through the M o L E and in accordance with the PIP, shall: (a) cause each Project State
participating in the Project to execute a Memorandum o f Understanding (MoU) with the
Addendum with each Project State ; (b) cause each Participating State to carry out i t s activities
under the Project in accordance with i t s respective M o U and the Addendum; (c) cause each
Participating State to maintain throughout the period o f Project implementation the State Project
Implementation Unit (SPIU), the State Steering Committee (SSC), the State Council o f
Vocational Training (SCVT), all in accordance with the M o U and in a form and with functions,
staffing and resources satisfactory to the Association; and (d) cause each Participating State to:
11
(A) select Industrial Training Institutes (ITIs) in accordance with the eligibility criteria contained
in the PIP; and (B) cause Project ITIs within such state to carry out their respective activities
under the Project in accordance with the PIP and the respective M o U and the Addendum; a l l in a
manner satisfactory to the Association.
The GoI, through the MoLE, shall: (a) establish by July 31, 2008 and thereafter maintain
throughout the period o f Project implementation, a monitoring and evaluation system; and (b)
monitor and evaluate implementation o f the Project at the national and state level with such
system in accordance with the PIP.
T h e GoI, through the MoLE, shall: (a) by April 30 and October 30 o f each fiscal year provide
Project Reports to the Association; and (b) by M a y 31 and November 30 o f each fiscal year
review the implementation o f the Project with the Association; all in a manner satisfactory to the
Association and as set forth in the PIP.
The GoI, through the MoLE, shall and shall cause the Participating States and Project ITIs, to
maintain financial management systems and to carry out the audits in a timely manner and in
accordance with terms o f reference set out in the Financial Management Manual.
T h e GoI, through the MoLE, shall and shall cause the Participating States and Project ITIs, to
carry out all procurement under the Project in accordance with the World Bank's Procurement
Guidelines and Consultant Guidelines and the Procurement Manual.
T h e GoI, through the MoLE, shall provide adequate financial and administrative powers to the
in the NPIU t o enable such coordinator to facilitate
National Project Coordinator ("C)
implementation o f the project.
The GoI, through MoLE, shall and shall cause the Participating States to implement the
Disclosure Management Framework (DMF) throughout the duration o f the Project, refrain from
taking any action which shall prevent or interfere with the implementation o f the DMF, not
waive, amend or abrogate this Framework and, provide a written report on progress achieved in
the implementation o f the Framework semi-annually.
IV. APPRAISAL SUMMARY
A. Economic and financial analyses
58. As part o f project preparation, two baseline surveys were undertaken in 2006: (i)
an institutional
survey o f all government managed and financed ITIs in India, and ii)a tracer study o f pass-out
(graduates) from a sample o f ITIs. These surveys are intended t o provide a pre-Project baseline for
internal and external efficiency outcomes for a substantial part o f the public vocational training system in
India.
59. The economic feasibility o f the project i s examined through cost-benefit analysis and rate.of return
calculations based on several assumptions and simulated over a variety o f scenarios. The benefits that are
expected from the Project, as reflected in the KPIs, are: (a) improvements in the internal efficiency o f
upgradedstrengthened ITIs, in terms o f the proportion o f enrolled students that successfully get trade
certification; (b) enhanced labor market outcomes o f IT1pass-outs, as measured by the proportion o f passouts finding employment within 12 months; and (c) by higher life-time earnings, as compared to the
baseline prior to project implementation.
60. A comparison o f the present values o f life-time wages o f pass-outs from two year IT1programs with a
group having the same level o f general education shows that the former receive at least 20 percent higher
wages using real discount rates o f 5-7 percent. Rates o f return (ROR) calculations based on various
combinations o f improved internal and external efficiency indicators range from 7.4 percent to 35.4
percent when the discount rate i s 5 percent, depending upon starting pay rising between 10-20 percent,
12
and the proportion getting trade certification increasing modestly t o 65 percent. In the high case scenario,
when trade certification increases to 75 percent, the rates o f retum become very high, ranging between
25.9 and 58.1 percent. Even with a higher discount rate o f 7 percent, the rate o f return i s generally
positive, between one and 18.4 percent.
61. These simulations highlight the conclusion that ITIs must improve their performance simultaneously
o n different fronts for the program to yield positive ROR. At a minimum, it requires attainment o f the low
case wage scenario o f 10 percent increase in starting pay as compared to their pre-IT1 upgrading baseline,
coupled with a 10 percent increase in rates o f trade certification and modest improvements in first-year
employment rates. Larger and more positive RORs are obtained with achievement o f the high case in the
different K P I s . The improvements in institutional governance and training reforms supported under the
Project should increase the likelihood o f achieving the high case KPIs.
B. Technical
62. The technical content o f the Program has been extensively reviewed with the Recipient.
Consultations have taken place with several policy planners, both at the national and State levels; with
institutional heads, faculty and students; and with employers and industry associations. The Bank has
taken an active role in these consultations. Detailed criteria for participation in the program by States and
institutions, and for selection o f proposals have evolved out o f these interactions and from discussions at
several workshops organized by the DGE&T. Some o f the issues given special attention are:
Involvement of the private sector and institutional autonomy: T h i s i s a critical element o f the
reforms package. IMCs are being constituted for a l l institutions with a representative f r o m local
industry as its chairperson. The I M C s will not just play an advisory role, but will be vested with
significant academic, managerial, administrative and financial autonomies t o make decisions on
their own training programs, t o engage or otherwise the contract faculty, and to generate, retain
and utilize revenues (other than prescribed fees).
Participation criteria: Only the States and the institutions that are willing and able t o introduce
desired reforms will be permitted to take part in the Project. The participating institutions will
have t o accept and implement these reforms along with safeguards t o ensure against misuse or
lack o f accountability.
Transparency in the institutional selection process: T o ensure confidence in the institutional
selection process and to engender competition between I T I s for participation in the program, it i s
essential that the selection process be both fair and transparent. I T I s seeking funds under the
Project must submit IDPs developed under the guidance o f the respective IMCs and through
consultation with the stakeholders. Each IDP will state the long, medium and short term goals o f
the institution, and provide an action plan for overcoming constraints to reaching their short-term
goals along with the physical, human and financial resources requirements. IDPs will be assessed
by the SSCs following transparent criteria, and those recommended by the SSC will be forwarded
to the N S C for selection. The role o f the N S C i s one o f quality assurance. I t will ensure that the
selection guidelines have been followed, that the overall approach o f each SSC i s consistent with
the Project objectives, and that the funds being sought are affordable and realistic.
Systemic reforms: A key element o f the Project i s enabling more broad-based and long-term
reforms t o be designed, piloted and evaluated. This will ensure that reforms and innovations that
are successful can be scaled up in the medium-tern, and that the entire CTS system becomes
more demand-driven and responsive to labor market needs.
Building capacity for project management and implementation, and monitoring and evaluation:
(a) A core group o f 4 middle level officials o f the DGE&T has been involved in project
preparation under the guidance o f senior officials. It i s desirable that this core group be inducted
13
into the NPIU, as and when i t i s established. These officials and the new staff to be appointed
have n o prior experience o f implementing Bank-funded projects, and will need considerable
guidance not only for performing their own functions but also for supporting SPIUs and ITIs in
project implementation; and (b) T o facilitate effective use o f data for policy formulation, planning
and decision-making, a comprehensive Management Information System (MIS) and
accompanying Monitoring and Evaluation (M&E) framework i s being established. The M&E
capacity o f the NPIU and SPIUs will need t o be developed to ensure proper program monitoring.
Timely availability o f information i s needed for policymakers to make course corrections as
needed. Go1 will need to identify institutions that could, with assistance from IDA, provide the
required training to the staff o f NPIU and SPIUs to efficiently and effectively discharge their
functions.
C. Fiduciary
Financial Management
63. Overall, financial management arrangements as proposed for the Project are considered t o be
adequate. However, considering that many o f the arrangements are yet t o be tested, relatively new
staffing arrangements, and the nationwide coverage o f the Project, timely and effective implementation of
the proposed financial management arrangements will be a challenge. Therefore, o n an overall basis, the
financial management risk o n the Project i s being rated as ‘Substantial’. This risk will partly be mitigated
by intensive supervision and support t o the implementing agencies at the Central and State/UT levels.
64. Accounting will be done on a cash basis, using Government systems; expenditure will be recorded
and reported at the time o f payments and not at the time o f release o f funds to a subordinate office. Rules
for accounting will be guided by the General Financial Rules (GFRs) as applicable t o all transactions at
the Go1 and State levels. A Financial Management Manual (FMM) has been prepared by MoLE. The
FMM clarifies and documents the procedure relating t o budgeting, funds flow, reporting, auditing, etc.
The FMM will be used for the purposes o f monitoring as well as for capacity building o f staff.
65. A National Project Implementing Unit (NF’IU) in the DGE&T in the M o L E and State Project
Implementing Units (SPIUs) in project States and U T s will monitor Project activities; these will be
resourced with adequate financial management staff. Responsibilities o f staff in the NPIU and SPIUs
have been clearly articulated in the Project Implementation Plan (PIP) prepared by the MoLE.
66. Project cost in States and U T s i s being borne by the Go1 and States in the ratio o f 75:25. For the
North-Eastern states and Sikkim, the financing ratio would be 9O:lO. The share o f Go1 funds will be
released by the M o L E to project States through Go1 channels and the funds so released will be received in
the State Treasury. At the State level, the Department responsible for Vocational Training (DVT) will
prepare a budget for the State-level project expenditure including i t s share o f 25 percent. Budgets will
then be allocated by the State Finance Department t o the DVT, which will further allocate the same to the
project ITIs and itself for incurring expenditure. Project expenditures will be reported by the I T I s to the
SPIUs and, by the SPIUs to the NPIU. The NPIU will submit consolidated Interim Unaudited Financial
Reports (IUFRs) on a quarterly basis t o the Bank within 45 days o f the end o f each quarter; the IUFRs
will form the basis for disbursement.
67. Annual accounts o f the DGE&T’s part o f the Project will be audited by the Comptroller and Auditor
General o f India (C&AG). The Accountant General (AG) o f each state will carry out an annual audit o f
accounts o f the SPIUs and ITIs as per specific TORS.The DGE&T will provide a Consolidated Report on
Audit to the Bank for the Project based o n audit reports o f the States and its own audit report. The
14
Consolidated Report on Audit will be submitted to the Bank within six months o f close o f each financial
year, i.e. by September 30.
Procurem ent
68. The Project will be implemented by the M o L E through the DGE&T, the Directorates concerned with
vocational training in the States, and the ITIs as selected. Procurement and financial management
capacity assessments have been carried out using the standard proforma adopted by the Bank and
proposed arrangements have been agreed with the DGE&T in the M o L E
69. Procurement o f works, goods and services will be carried out in accordance with the World Bank’s
“Guidelines: Procurement under lBRD Loans and IDA Credits” dated M a y 2004 as updated; and
“Guidelines: Selection and Employment o f Consultants by World Bank Borrowers” dated M a y 2004 as
updated and the Procurement Manual prepared by the DGE&T for the Project. The arrangements for
procurement are satisfactory assuming that formal and on the j o b training o f procurement staff involved
in the Project will be provided as planned. Measures to enhance transparency are summarized in
Appendix 1 to Annex 8.
D. Social
70. The Project Development Objective i s to improve the employment outcomes o f graduates from the
vocational training system, and as such, it seeks to maximize the success o f all the CTS graduates
regardless o f their social and economic status. T o this end, a Social Assessment (SA) was carried out to
examine h o w students from traditionally disadvantaged backgrounds in India, such as Scheduled Castes
(SC), Scheduled Tribes (ST), women and the poor, fare in the I T I s and ITCs, and how any disadvantages
they experience in the system might be addressed to improve their outcomes. The SA found that students
from disadvantaged backgrounds j o i n the ITIs with little knowledge o f what the education entails and
what lies ahead in terms o f employment. Their enrolment, retention and graduation rates are l o w when
compared with other students. Many drop out, particularly in the first six months, because o f the ‘alien’
pedagogy and curriculum (very different from the school education they were used to), their poorer
economic status, and unsupportive home environments.
71. There were n o reports from students o f social discrimination; and trainers felt that after the first six
months there were n o differences between the disadvantaged students and the others. Women students
looked at vocational training as a ‘time-filler’ with the potential o f “raising their value in the marriage
market”. Many opted for traditional trades (such as tailoring), and their continued training and labor
market participation were highly dependent o n their home environment, especially if they were married.
The majority o f students were interested in public sector employment (e.g. in the railways) which i s
considered secure, in preference to private sector or self-employment. In general, they were unaware o f
employment opportunities, received virtually n o career guidance, and had n o career plans. As one would
expect, rural institutions had more students from the disadvantaged backgrounds while the less
disadvantaged studied at urban facilities. However, on this and other parameters, it was not possible to
obtain a good quantitative assessment o f achievements among these students or to make robust
comparisons because o f limited data availability.
72. T h e different issues noted above which contribute to continuing disparities among these students are
addressed in the Project through an “Equity Assurance Plan” which i s presented in Annex 10. It includes
a variety o f actions through several project mechanisms including: the criteria for selection o f ITIs,
project management arrangements and, monitoring and evaluation.
15
E. Environment
73. EA Process and Outputs: The planning, development and management o f ITIs involves some
important environmental obligations. The Environment Assessment (EA) analyzed the existing situation
to provide for effective and optimal utilization o f resources to help design and implement the Project in an
environment friendly manner. The process comprised of: (i)
Environment Assessment, which was carried
out to identify key environmental issues and assessment o f impacts; and (ii)Preparation o f an
Environment Management Framework (EMF) to address the identified issues. In this context, the
EA/EMF covered review o f standards, statutory and other provisions; assessment o f existing situation
through site visits and consultation with various stakeholders; documentation o f current practices and;
preparation o f an EMF.
74. Key Environmental Issues: The nature o f activities proposed under the project does not pose
significant environmental risks. However, some environmental concerns are associated with activities
such as civil works for creatiodexpansiodrepair o f buildings; and introduction o f new trade courses
creating pressure on already stressed basic facilities in the campus and particularly if these involve
pollution risks. The EA has revealed that a majority o f environmental issues primarily pertain to: (i)
poor
site planning and design (locatiodsite planning/accessibility/design); (ii)
lack o f proper maintenance o f
buildings and associated services; (iii)
improper resource consumption; and (iv) lack o f environmental
augmentative measures.
75. Environment Management in the Project: Appropriate measures have been suggested and
developed in the Environment Management Framework (EMF) to minimize and mitigate the likely
adverse environmental impacts associated with the Project. The framework provides a useful set o f
measures, which would help in preventing, minimizing and/or managing various environmental, health
and safety concerns faced during construction, operation and maintenance o f I T I s . These measures can be
categorized under the following three heads:
0
Campus environment management - Improvement o f campus environment i s envisaged through
adequate provisiodenhancement o f the quality o f basic services/facilities such as water
(including potable water); power; waste collection and disposal; drainage; sanitation (clean
bathrooms and toilets); adoption o f fire safety practices including safe storage o f inflammable
materials; and personal protective equipment (as required for specific activities). This will also
include constructionhepair time safety practices.
0
Inclusion of environmental, health and occupational safety aspects in the curriculum Industry
specific environmental, health and occupational safety issues will be adequately built in the
curriculum for the improved vocational education system. This would also cover incorporation o f
industry specific demand driven issues into the curriculum.
Documentation of good and bad practices to promote awareness, knowledge and ensure wider
recognition o f such practices.
-
76. Safeguard Implementation Arrangements. The DGE&T will assume the overall responsibility for
adequate maintenance o f the personnel and resources required to supervise, monitor and implement EMF.
Management o f environmental aspects shall be addressed by designating an Environment Officer, who
will co-ordinate, monitor and provide support for: (a) satisfactory implementation o f the EMF; (b)
orientation and training for field level staff o f the concerned State Directorates and concerned ITIs and
other stakeholders; and (c) reporting and documentation. The DGE&T will share with the Bank semiannual reports at the JRMs, which will include a section on EMF implementation and related activities.
77. Public Consultation and Disclosure: Consultation with various stakeholders was carried out as a
part o f the EA exercise through interviews, formal and informal discussions. T h e stakeholders consulted
at the local level included IT1 staff (Principals, faculty and other staff); current students; recent graduates;
16
and senior and middle level managers/ representatives o f the industry. The consultation and disclosure at
the central level was carried out through a national level workshop at N e w Delhi. This workshop was
organized in January 2007 and the participants included officials o f the DGE&T, officials from the
concerned State Directorates and the representatives o f national level industry associations such as C I I
and FICCI. These consultations have provided useful inputs in developing the EMF for the Project. The
executive summary o f the Environment Management Framework (English and Hindi versions) has also
been uploaded o n the DGE&T website (http://dget.nic.in). These have also been placed in the State
Directorates and an advertisement has been placed in the newspapers for public information in this regard.
The document was also disclosed in the Bank's Infoshop in M a r c h 2007.
F. Safeguard policies
Safeguard Policies Triggered by the Project
Environmental Assessment (OPBP 4.01)
N a t u r a l Habitats (OPBP 4.04)
Pest Management (OP 4.09)
Cultural Property (OPN 11.03, b e i n g revised as OP 4.1 1)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OP/BP 4.10)
Forests (OPBP 4.36)
Safety o f D a m s (OPBP 4.37)
Projects in Disputed Areas (OPBP 7.60)*
Projects on International Waterways (OPBP 7.50)
Yes
[XI
[I
[I
11
11
[XI
[I
[I
[I
[I
No
[I
[XI
[XI
[XI
[XI
[I
[XI
[XI
[XI
[XI
78. Environmental Assessment (OP/BP/GP 4.01). The nature o f activities proposed under the project
does not pose significant environmental risks. However, some environmental concerns are associated with
activities such as civil works for creatiodexpansiodrepair o f buildings; and introduction o f new trade
courses, creating pressure on the already stressed basic facilities in the campuses and particularly if these
involve pollution risks. The EMF would help in enhancing the Project benefits and in
avoiding/minimizing adverse impacts o n environment.
79. Indigenous Peoples (OP/BP 4.10): An Equity Assurance Plan has been developed by the Recipient
which includes a variety o f actions through several project mechanisms targeted t o
disadvantagedindigenous groups, including: the criteria for selection o f ITIs; competitive fknding f r o m
the Incentive Fund for States and public organizations; funding from the Innovation Fund for competitive
grants open to both public and private institutions; and Project management, monitoring and evaluation.
G. Policy Exceptions and Readiness
80. No policy exceptions are sought. Elements o f project readiness, which have been meet, include:
Setting up a National Steering Committee and National Project Implementation Unit;
0
Preparing a procurement plan for the first 18 months o f the project;
0
Preparing o f the Project Implementation Plan (PIP), providing detailed guidelines for
implementation o f the project;
0
Finalizing the key performance indicators and targets based on a baseline survey; and
0
Meeting disclosure requirements.
' By supporting the proposedproject, the Bank does not intend to prejudice thefinal determination of the parties' claims on the
disputed areas
17
Annex 1: Country and Sector o r Program Background
INDIA: Vocational Training Improvement Project
1. Largely because o f the growth in factor productivity, India’s economy has grown rapidly over the
past decade. Continuing to raise labor productivity while at the same time generating enough jobs for a
growing labor force i s proving to be a massive challenge. T h i s issue has come into sharp focus over the
previous decade when the country’s economic growth accelerated but employment growth f e l l to less than
h a l f that o f the 1980s, raising fears that India i s witnessing jobless growth. However, currently the trend
seems to be reversing.
2. The human capital o f the workforce - education and skills - contributes not only to productivity
growth but also to the employment and earnings prospects o f individuals. The evidence suggests that
since the early 1980s, the demand for workers with secondary education has outstripped supply from the
formal schooling system. The relative wages o f workers with qualifications beyond primary school have
grown far more rapidly than those o f workers with primary school or lower education, even as their
numbers have become relatively more abundant. The evidence for workers with post-school technical and
vocational training i s more mixed, and their relative wages and numbers have fallen since the early 1990s.
While definitive inferences about supply-demand cannot be drawn, the evidence suggests that this group
o f workers may not have the right s k i l l s demanded by the labor market (perhaps because o f the poor
quality o f training provided). Alternatively, students may see few labor market benefits from undertahng
vocational training and opt, instead, to enter the labor market directly or continue with further education.
3. Consensus i s emerging that for continued economic and j o b growth, India will need t o improve both
the supply o f appropriately skilled workers as well as the quality and labor market relevance o f training.
A skilled workforce enhances the efficiency and flexibility o f the labor market, reduces skills bottlenecks,
and enhances mobility and productivity. One key supplier o f shlled workers i s the Vocational Education
and Training (VET) system. A major component o f the VET system i s the Craftsmen Training Scheme
(CTS) operated under the auspices o f the Ministry o f Labor and Employment (MOLE), the National
Council for Vocational Training (NCVT), and the State Departments dealing with vocational training and
State Councils for Vocational Training (SCVTs). The CTS operates through 5 114 training institutes with
a total capacity o f 741,000 students (mostly in two year courses) a year. There are two types o f
institutions: (a) Industrial Training Institutes (ITIs) - financed and managed by state DVTs and providing
places for about 400,000 students in 1,896 institutes; and (b) Industrial Training Centers (ITCs) - owned,
financed and managed by private organizations or NGOs and providing places for about 34 1,000 students
in 3,218 centers.
Vocational Training in the Public Sector
4. Labor market outcomes for graduates o f the training system are fairly poor. One year after
graduation, less than 30 percent o f graduates find employment. T h e main reason for this seems to be the
mismatch between the skills attained and those actually in demand in the labor market. Employers report
experiencing problems finding employees with the right skills. In most cases, these shortages were in
trades that were supplied by the ITIs and ITCs, implying that their graduates did not suit employers’
needs. Most employers felt that the IT1 graduates did not perform well enough in the use o f computers,
practical use o f machines, communications and team work practices. Employers also felt that the
graduates lacked practical knowledge and needed significant on-the-job training to bring their s k i l l levels
up to that needed by industry.
5. These poor outcomes arise from the many constraints that the public training system faces, including
the following:
18
0
0
Institutions do not have incentives to improve their pe$ormance.
Managers o f training
institutions have little freedom to fill training places to capacity, replace training courses with
new ones, and ensure that students receive quality training.
Industly involvement in the vocational training system is nascent. Until recently there was
limited participation o f employers in defining training policies and in developing courses. This
i s now changing, and industry associations and individual employers are showing considerable
interest in being involved in managing ITIs.
6. Recognizing this, the Go1 i s now in the process o f implementingvarious reforms at the policymaking
and institutional levels. I t has established a clear demarcation between the roles and responsibilities o f the
N C V T and the SCVTs, as well as coordination mechanisms between them, and i s expanding i t s role in
the provision o f information and facilitating the evaluation o f training provided in institutions. At the
institutional level, both the Central and the State governments are making efforts to involve the private
sector in institutional management to promote greater responsiveness to labor market needs. Institute
Management Committees (IMCs), chaired by the private sector and involving employers, are increasingly
being established. State governments are providing these I M C s with greater autonomy t o make decisions
- letting ITIs, in consultation with employers, decide o n their own training programs; giving institution
managers the freedom to engage or otherwise contract instructors; allowing ITIs to generate revenues
(other than prescribed fees); and allowing I T I s to set more realistic fees (with the governments s t i l l
bearing a significant portion o f the institutional financing).
7. In the medium-term, a National Vocational Qualifications Framework (NVQF) will be established to
bring about greater consistency and cohesion among the many players. I t will be important to develop an
NVQF based on specified standards o f training, leading eventually to the development o f industryrelevant modular training courses. This will also provide a framework for identifjmg and establishing
course assessment standards and pre-requisites for entry into training.
Trainingfor the Informal Sector
8. Over 90 percent o f employment in India i s in the ‘informal’ sector, with employees working in
relatively l o w productivity jobs. Provision o f skills appropriate to this sector will be an important policy
intervention to increase the productivity levels o f this segment o f the workforce. B o t h demand and
supply-side constraints have inhibited skills development in the informal sector. On the demand-side,
few employees in the informal sector see the importance o f skills training; indeed, many identify poor
access to capital, cumbersome bureaucratic bottlenecks, and lack o f access to quality equipment as being
their main challenges.
9. On the supply-side, there has been various attempts to provide training to the informal sector. T h e
most important initiatives are probably the Community Polytechnic Scheme training about 450,000
people a year within communities; Jan Shikshan Sansthan offering 255 types o f vocational courses to
almost 1.5 million persons, mostly women; and the National Institute o f Open Schooling (NIOS) offering
85 vocational courses through over 700 NIOS-recognized training providers. None o f these programs has
been evaluated rigorously.
10. T o date, public and private formal training institutions play a limited role in producing skills for the
informal sector. While one o f the mandates o f ITIs and ITCs i s to train workers for the informal sector,
evidence shows that this i s rarely the case. The share o f IT1 graduates who entered self-employment or
became employers i s not much greater than 10 percent while only around 5 per cent o f ITC graduates j o i n
the unorganized economy. The main reason i s that running a small business requires much more than
simply possessing a particular occupational slull. Running a small business requires a person to be multiskilled in a variety o f areas, the kind o f training not imparted currently in ITIs or ITCs.
19
11. The diverse training needs o f the informal sector operators cannot be met by simply reorienting public
training institutions to serving a different population. The skills set and experience o f the existing faculty
in public training institutions are not readily refocused t o serve both the formal and the informal sectors.
Major investments are needed to upgrade facilities and equipment; t o attract, develop and retain new
faculty, and to develop new curricula and materials to provide the package o f skills needed by the
informal sector. Locally based non-government training providers and NGOs may b e better situated and
more effective in providing the kinds o f training services that are suited t o the needs o f the informal
economy.
12. Outside o f institutions, training in the informal sector i s provided through traditional apprenticeships
but these have significant weaknesses. Although reliable data for India are not available, figures for other
countries suggest that many young people acquire competencies through traditional (informal)
apprenticeships, with figures ranging anywhere from 50 t o 70 percent o f employees in micro-enterprises.
These apprenticeships are based o n traditional technologes and ideas from previous generations, and the
quality o f training i s only as good as the skills o f the master and, the master’s willingness and ability t o
pass o n those skills. The theoretical aspect o f learning i s often weak or absent; and only the simplest
skills are learnt so that l o w quality products are produced and productivity remains low.
13. The Go1i s t a h n g steps t o facilitate training for the informal sector, including: (i)
establishing a policy
framework (regulations and incentives); (ii)
supporting curriculum development, training o f trainers, and
competency-based skills testing financed through the GoI’s soon-to-be launched Modular Employable
Skills (MES) program. Other steps that the government could take in this direction include: (i)
using tax
incentives or financial support t o stimulate private investments so as t o increase the capacity and the
quality o f training; and (ii)
revising the outdated Apprenticeship A c t with regulations that hamper
enterprise-based training.
Private Provision of Pre-employment Training
14. Apart f r o m the ITCs, India has a weak non-public training market. While it i s not possible t o
document the size o f the private training sector because o f the large number o f unaccredited training
providers, the number o f training places o n offer appears to be smaller than the places offered by I T I s and
ITCs. However, anecdotal evidence suggests that the size o f this sector i s growing.
15. There are significant differences between public and private provision o f training. Only about 15
percent o f students are enrolled in engineering-related trades in the privately funded unaccredited training
institutions, as compared t o over 80 percent in the I T I s and ITCs. The average duration o f courses i s also
shorter, and studendteacher ratios are significantly higher. While some institutions receive funds from the
government, most are financed through fees. In terms o f outcomes, the results appear mixed - ITC
graduates do not fare any better in the labor market than the IT1 graduates; self-reported data from other
private training providers suggests that only 40-50 percent o f their graduates were employed within six
months o f leaving the training centers.
16. K e y problems faced by private training providers include lack o f access to resources and regulatory
barriers that hinder entry into the training market. M a n y private providers identified access to credit for
working capital, and financing o f initial investments in the private training centers as key constraints t o
setting up the training centers with adequate facilities, and to upgrading the existing facilities. According
to a World Bank study (“Skills Development in India: The Vocational Education and Training System”,
World Bank, 2006), while the level o f regulation i s not uniform across States, most private providers
complain about excessive government bureaucracy in registration o f training institutions, as well as in
20
accreditation and certification o f courses offered. In order to get around these bureaucratic constraints,
many private institutions simply choose to remain unaccredited.
17. The government should remove constraints on setting-up training institutions to facilitate private
provision o f training. Malung legislation clear and registration procedures simple would ensure a vigorous
private sector response. Here again, the governments can play a key role in disseminating information
about the course offerings and quality o f training provided by different providers, both public and private.
W i t h an eye to ‘leveling the playing field between public and private providers’, the State governments
can actively disseminate relevant information about, for example, types o f training provided, fees, and
dropout and completion rates o f different providers. A deeper analysis o f these issues will be undertaken
as part o f the Project
Financing Vocational Education and Training
18. Funding i s s t i l l narrowly focused o n publicly provided training. With the State authorities focused o n
providing training through the public sector, almost n o attention i s being paid to using innovative
financing mechanisms as a means o f encouraging delivery o f good quality training, whether public or
private, or o f providing incentives to enterprises to take o n greater responsibilities for in-service training
o f their workers. States are losing a valuable opportunity to leverage their limited training resources
through such mechanisms.
19. It i s difficult to get a clear picture regarding trends in financing o f training. Data o n the financing o f
both vocational education and vocational training are scarce - State-level data o n vocational education
funding i s usually reported together with the data for general secondary education, while the vocational
training funding data i s often lumped together with other programmatic information. Different
departments are responsible for vocational education and training in different states and there i s little data
comparability across agencies. Having said that, the limited data available suggest that the total public
funding for vocational training i s around US$250-300 million annually.
20. T h e funding model used by the states i s largely ineffective. Although training resources available t o
the States are limited, n o State seems to follow a transparent funding formula in the funding o f vocational
education or training. Once an institution begins receiving funds, subsequent funding i s usally guaranteed
irrespective o f the institution’s performance. The same levels o f funding are allocated to poorly
performing institutions with high drop-out rates as t o those that maintain a high quality o f teaching and
training performance.
21. Training providers have insufficient interest in their financial state o f affairs. Student fees in I T I s are
retained by their respective State governments, leaving the managers o f training institutions with n o
financial incentive to meet the labor market needs - a common failing o f supply-driven VET models.
Although unit costs are high, few institutions have the incentive to invest in critical training inputs since
the majority o f funds provided go towards faculty and staff salaries.
22. This simple financing framework i s n o longer adequate for meeting the emerging s k i l l needs o f the
Indian workforce in a rapidly globalizing economy. There i s need for the government to consider h o w
financing can be better structured to foster increased in-service training among enterprises, greater private
provision o f training, as well as greater cost-sharing with the beneficiaries. Given this, there are two sets
o f issues to attain the desired objectives: (a) how to best mobilize resources for training; and (b) h o w to
allocate resources most effectively.
21
Resource Mobilization
23. Several steps can be taken to improve resource mobilization, including giving institutions greater
latitude t o generate resources and use the proceeds for operating costs; and asking beneficiaries-the
students and the employers-to bear part o f the costs o f training. Currently student fees amount t o less
than five percent o f the total training cost; a more realistic costing structure might have students paying a
larger proportion o f the training costs, an option n o w under consideration in several States. Firms could
contribute to training levies (a certain percent o f payroll similar t o the education cess) and be reimbursed
in whole or in part on the training they undertake in recognized public or private institutions. This would
not only stimulate firms to train or train more, but the competition t o serve these firms would have the
additional benefit o f encouraging training providers t o become more responsive t o employers’ s h l l needs.
As levy schemes are difficult to design and require a high degree o f administrative efficiency and
transparency, this option needs t o be carefully thought through before being pursued in the medium-term.
Resource Allocation
24. Irrespective o f the source or volume o f funds, a better mechanism for allocating resources i s needed.
A Training Fund could be one vehicle for doing this - it unifies and augments public funding and
allocates resources in line with the national policies and priorities. Its main purpose i s to move systems
from supply-driven to demand-driven models - and for that reason it should include even government
contributions. Institutions are funded directly but are required t o apply for resources, ideally in a
competitive field. Instead o f transferring resources to institutions o n an ad hoc basis, resources could be
transferred through the Fund o n the basis o f input or output criteria. Institutions could be financed
according t o the estimated cost o f inputs (e.g. by using norms such as the number o f trainees enrolled or
number o f classes). An alternative method could be to fimd institutions based on outputs or outcomes.
Output targets can be defined in absolute terms (e.g. number o f course completions, pass rates on
examinations) or in relative terms (e.g. years t o completion). Outcome targets measure the success o f
training providers in meeting labor market needs (e.g. j o b placement within a reasonable time). The key
i s t o define transparent criteria that are easily measured but not easily manipulated. The feasibility o f
setting up such a Fund will be explored by the Project.
22
Annex 2: M a j o r Related Projects Financed by the Bank and/or other Agencies
INDIA: Vocational Training Improvement Project
Sector Issue
Name of the Project
B a n k Financed
0
0
0
0
0
0
Improve the quality and efficiency o f basic crafismen and
apprenticeship training;
Expand and diversify the advanced training programs; and
Strengthen the National Vocational Training System
Increase participation o f women in all programs.
Expand the capacity o f the polytechnic education system;
Improve the quality o f polytechnic programs; and
Enhance the efficiency o f management and operation o f
the polytechnic system.
The project covered 279 polytechnics in the States o f Bihar,
Goa (included in the project in 1993), Gujarat, Kamataka,
Kerala, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh
and the four regional Technical Teachers’ Training Institutes
at Bhopal, Calcutta, Chandigarh and Chennai.
0
Expand the capacity o f the polytechnic education system;
Improve the quality o f polytechnic programs; and
0
Enhance the efficiency o f management and operation o f
the polytechnic system.
The project assisted 249 polytechnics in the States o f Andhra
Pradesh, Assam, Haryana, Himachal Pradesh, Maharashtra,
Punjab, Tamil Nadu, West Bengal, the National Capital
Territory o f Delhi and the U n i o n Territory o f Pondicheny.
T o assist in upgrading the training o f medium and high level
technical and professional manpower needed for the rapid and
efficient growth o f the electronic industry
0
0
Developing/expanding capacity to provide increased
access to technician education;
Enhancing quality o f education to produce better trained
technicians; and
Improving efficiency through better planning,
administration and utilization o f the system and increasing
i t s responsiveness to emerging labor market needs.
Latest Supervision R a t i n g
Implementation
Vocational Training
Project (POO9990)
(Cr. 2008-IN)
(Closed FY 99)
Technician Education
Project (POO9989)
(Cr. 2130-IN)
(Closed FY 99)
HS
HS
HS
Education Project
(POO9988)
(Cr. 2223-IN)
(Closed FYOO)
Electronics Industry
Development-HRD
Component
(Ln. 3093-IN)
(Closed FY 96)
Third Technician
Education Project
(P050658)
(Cr. 3413-IN)
The project assists the industrially and economically
underdeveloped and geographically remote states o f the
northeastern region (Arunachal Pradesh, Meghalaya, Mizoram,
Nagaland, Sikkim, and Tripura), Jammu & Kashmir, and the
Union Territory o f Andaman & Nicobar Islands.
23
Annex 3: Results Framework and Monitoring
INDIA: Vocational Training Improvement Project
Results Framework
Project development objective
Project outcome indicators
The PDO i s to improve the
employment outcomes o f graduates
from the vocational training system,
by making the design and delivery
o f training more demand responsive.
0
I
Used in conjunction with
intermediate output indicators and
impact evaluations, these data on
ITIs’ internal and external
efficiencies are used to confirm
whether achievement o f the PDO
i s on track.
Percent o f pass-outs from project ITIs
that exit from the CTS system with a
N C V T certificate, as compared to the
baseline.
Percent o f pass-outs from project ITIs
who find employment within one year
o f finishing training, as compared to the
baseline.
Real monthly earnings o f employed
pass-outs from project ITIs measured
one year after finishing training, as
compared to the baseline.
0
I
I
Intermediate results
Use of project information
Results indicators
I Use of results monitoring
Component 1: Improving Quality o Vocational Training
Sub-component 1.1:
Strengthening Industrial Training
Institutes
T o improve quality o f IT1training by
strengthening 400 existing and
competitively selected ITIs with
private sector-led Institutional
Management Committees (IMCs),
through setting up Centers o f
Excellence (COEs) or by upgrading
IT1 training facilities for high
demand local trades.
0
Percent o f ITIs with active private
sector participation and leadershlp in
IMCs, as measured by attendance at
committee meetings and subjectively
through field visits by SPIU.
T h e proportion o f a StateLJTs
allocation that has been expended.
T h e proportion o f relevant instructor
vacancies that are filled.
Private sector leadership o f I M C s
i s key to making ITIs more market
oriented in training delivery.
Competitive selection o f I T I s
ensures that resources are
allocated to StatesATIs o n
merit/performance.
Filling instructor vacancies
ensures that trainees get quality
and appropriate training.
24
Sub-component 1.2:
Training o f Trainers
T o enhance the system’s capacity to
train new instructors and to provide
both basic and refresher courses and
specialized programs to current
instructors as needed.
0
Number o f Instructor Training Wings
(ITWs) establishedupgraded to provide
entry-level instructor training.
Competitive selection o f States to
provide training-of-trainer funding
ensures resources are allocated to
StatedITIs o n meridperformance.
Number o f new and current instructors
given basic and refresher or specialized
instructor courses.
These indicators w i l l be used to
measure the successful expansion
o f instructor training capacity.
Number and types o f grants provided to
well-performing StatesAJTs and the
distribution o f these resources to
projecthon-project ITIs.
Competitive selection o f states
and ITIs for additional funding
ensures that resources are
allocated o n the basis o f merit and
actual performance.
Sub-component 1.3
Incentive Fund
T o provide additional resources to
well-performing StatesAJTs in years
3 and 4 to leverage training in
emerging/export oriented areas or to
expand coverage o f training to nonproject ITIs.
Impact evaluations will be
conducted o n activities funded by
the Incentive Fund.
Component 2: Promoting Systemic Reforms and Innovations
Sub-component 2.1:
Promotion of Reforms
To promote systemic reforms through
studies that provide viable reform
proposals, and study tours and shortt e r m programs to enhance capacity for
reform implementation.
Number o f studies commissioned by
NPIU.
In the medium-term, these
studies will provide the basis for
undertaking broad-based reforms
o f the vocational training system.
T h i s indicator will be used to
monitor capacity building o f
government and private sector
leaders about international best
practices in vocational training.
Sub-component 2.2:
Innovations Fund
T o support piloting o f innovative
activities which improve quality o f
formal and informal training provided
by ITIs and ITCs through competitive
grants.
Number o f innovations proposals
financed by Innovation Fund.
25
T h i s indicator will be used to
identify training strategies and
policy reforms that could be
implemented in the mediumt e r m
if found effective.
I
Sub-component 2.3:
Strengthening Capacity to Develop
Curriculum and Resource Materials
AH1 - number o f trades upgraded with
new technology curricula, and
instructor training programs
introduced.
AH1- development o f norms and
standards for COEs’ instructors
training and assessment procedures
for COE instructors.
CSTARI - number o f trade curricula
developed with private sector inputs.
NIMI - Number o f instructional media
packages (IMP) and self-learning
uromams develoued and uublished.
To build capacity o f 3 central
institutions in new curriculum and
instructional media packages
development, s k i l l assessment and
testing, and training standards.
0
Apex Hi-Tech Institute (MI)
in Bangalore
Central Staff Training and
Research Institute (CSTARI)
in Kolkata
National Instructional Media
Institute (NIMI) in Chennai
These indicators are monitored to
assess progress made by the
centrally-funded institutions in
upgrading and developing new
curricula and instructional media
packages, and setting standards
for improving skdls o f instructors
to provide quality training to
students.
I
Component 3: Project Management, Monitoring and Evaluation
Component 3.1:
Project Management
To establish central and state-level
organizations to manage, guide and
monitor project implementation by the
centrally-funded institutions, States
and ITIs.
0
A National Steering Committee
(NSC), supported by NPILJ,
established.
State Steering Committees (SSC),
supported by SPIU, established.
Capable and well coordinated
management structures at the
central, state and ITI-levels are
key to effective implementation
Baseline IT1institutional survey and
tracer study o f IT1 graduates.
Web-based Management Information
System (MIS) implemented, based on
baseline surveys and field visits.
Semi-annual joint GoI-IDA review o f
project implementation progress
Project impact evaluation undertaken
at mid-tern and end-term by
independent localhternational
consultant fm.
Institutionalized data gathering
and analysis, and dissemination o f
relevant information o n I T I s and
IT1pass-outs facilitate project
monitoring, assessing impacts,
and making mid-course policy
corrections and reforms as needed.
Component 3.2:
Monitoring and Evaluation
To provide an effective monitoring
and evaluation system to: (i)
monitor
resource usage; (ii)
assess project
implementation progress, and (iii)
evaluate program impacts through
assessments and studies
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Annex 4: Detailed Project Description
INDIA: Vocational Training Improvement Project
I.Background
1. Recognizing the major role that quality skilled manpower has played in the economic development o f
the country and in the export o f goods and services, the Government o f India (GoI) has decided t o focus
attention o n the production o f highly skdled craftsmen. In this context, i t i s guided by the observations
and directions provided by the Prime Minister and the U n i o n Finance Minister as summarized below:
In his 2004-2005 Budget Speech, the Finance Minister pointed to the need for upgrading I T I s in a
public-private partnership mode. H e stated: “The skills imparted by ITIs must keep pace with the
technological demands of industry and the expanding universe of knowledge..... I n order to produce
technicians of world standard, Government proposes to launch a program in the Central sector to
upgrade 500 ITIs over the next 5 years at the rate of 100 ITIs a year. Appropriate infrastructure and
equipment w i l l beprovided, the syllabi w i l l be upgraded and new trades w i l l be introduced, This is an
area where I welcome Chambers of Commerce and Industry to j o i n hands with the Government and
create a public-private partnership model for designing and implementing the scheme. The selection
of ITIs w i l l be done in consultation with the State Governments. ’’
Similarly, the need to upgrade I T I s within a public-private partnership framework was emphasized by
the Prime Minister at the Shram Awards Function on October 4, 2004 at N e w Delhi: “The skill level
of our worybrce is an area of concern. The quality of manufacturing output and the wages paid to
labour are critically dependent on the quality of labour force .... While strengthening and modernizing
our Industrial Training Institutes (ITIs) and the Apprenticeship Training Schemes, we need to realize
that there must be active involvement of industry - both in the private sector and in the public sector
in the task of curriculum design and management of these programmes.
”
2. These statements have been reiterated by the Prime Minister, Finance Minister and other senior-level
policymakers o n several occasions subsequently.
3. Recognizing that the current centralized management style i s malung the craftsmen training system
inadequately responsive t o the emerging demands o f the rapidly developing economy, the Go1 i s keen to
undertake reforms that would move towards a system where the Government plays the key roles o f policy
development, s k i l l standards setting, financing, and monitoring and evaluation while engendering greater
competitiveness and accountability in training institutions.
4. A key ingredient o f GoI’s reform agenda i s to move the private sector into a lead role at all levels o f
decision making - from policymaking at the Central and State levels t o managing individual training
institutions. The Ministry o f Labor and Employment (MOLE)i s working closely with the private sector to
translate this vision into reality. T o do this, i t has made the decision that the operations o f all I T I s will be
managed by Institute Management Committees (IMCs) with majority representation from employers. The
IMCs, chaired by a local industry representative, will be vested with adequate academic, managerial,
administrative and financial autonomies. This decision t o form IMCs i s supported by the Confederation o f
Indian Industry (CII) and the Federation o f Indian Chamber o f Commerce and Industry (FICCI) -the two
largest employer federations in India.
5. Other important ingredients in GoI’s medium-term agenda o f systemic reform include
modernizatioddevelopment o f curricula t o meet international standards, development o f a national
31
qualifications framework, leveling the playing field for public and private sector providers, and designing
and implementing a training fund. These reforms have support at the highest level o f the GoI.
6. Over the next few years, Go1 aims to use the IMC mechanism t o upgrade 500 ITIs, making i t a
condition that only ITIs with an IMC in place will qualify t o receive funding for upgradation. The
performance o f these training institutions will be closely monitored and evaluated t o assess the impact o f
these reforms on labor market outcomes. The Go1 has already initiated i t s reform agenda with upgadation
o f the first set o f 100 I T I s using domestic resources.
11. The Project by Components
7. The Project development objective i s to improve the employment outcomes o f graduates f r o m the
vocational training system, by making the design and delivery o f training more demand responsive.
8. The Project, covering about 25 percent o f a l l publicly funded ITIs, will have three components: (i)
Improving the quality o f vocational training, (ii)
Promoting systemic reforms and innovations, and (iii)
Project management, monitoring and evaluation.
Component-1: ImprovingQuality of Vocational Training [Total: US$301million, IDA: US$228
million]
9. T h i s component focuses on improving the quality o f training imparted in I T I s , piloting enhancements
in system capacity and quality for “training o f trainers”, and providing States with incentive funds to
leverage training resources that would further the objectives o f the Project.
Sub-Component 1.1: Strengthening of Industrial Training Institutes
10. The Go1 has already started strengthening the first set o f 100 I T I s from domestic resources. The
Project will thus direct i t s support towards strengthening 400 eligible ITIs (selected competitively from
eligible States) t o provide high quality training through Centers o f Excellence (COE) in about 300 I T I s
and by upgrading training facilities in another 100 ITIs. Eligibility criteria for States and I T I s t o
participate in the project are laid out in Section 111below.
11. A critical reform being introduced into the system i s the significant delegation o f academic,
managerial, administrative and financial autonomies to IMCs and institutions. These include the power to
suggest modifications t o different existing courses; add new trades and abolish trades that are redundant
or irrelevant; generate, retain and use all revenues from the sale o f goods and services; and engage
contract faculty. In addition, while Principals have had almost n o financial authority to award contracts
(less than $100 in most States); this power i s n o w being significantly enhanced for amounts up to $20,000
per contract.
12. Greater accountability i s also being fostered. The main responsibility for h o w the project performs
will rest with the State governments rather than with individual institutions, which inevitably follow the
policies and directions (implicit and explicit) o f State authorities when exercising authority they are
given. The Project thus assigns primary accountability for project performance to the State governments,
and reflects this in several provisions. Firstly, an Incentive Fund that can be used by States to extend the
benefits o f the Project beyond the participating I T I s (see sub-component 1.3 below). Only 20 awards will
be made by the NSC and only those States that have performed satisfactorily, judged against outcome and
output indicators, will be invited t o apply. The first Incentive awards and any re-allocation o f funds will
take place after the joint mid-term review. All indicators will be monitored regularly before then,
discussed with States, and made publicly available through the DGE&T website, but i t will only be by the
32
mid-term that robust and justifiable rewards or penalties could be exercised. Secondly, the selection o f
ITIs will be done in two cycles and the performance o f the participating states that will be used as a
criterion for selection o f IT1in the second cycle.
13. O f the 400 I T I s to be funded through this Project, 100 ITIs have already commenced their
institutional project implementation as o f August 2006. Only expenditures from this set o f I T I s will be
financed retroactively up to a maximum o f 12 months prior to date o f signing o f Financing Agreement,
provided that expenditures were made in accordance with W o r l d Bank guidelines for procurement o f
works, goods and services. The total amount o f retroactive financing will be limited t o 20 percent o f the
Project Credit.3
14. Strengthening ITIs, and the specific trades selected for funding, will be achieved in several ways,
modernization and strengthening o f
including: (i)refurbishment o f teaching-training infrastructure, (ii)
existing workshopsAaboratories to support revised Curricula, (iii)
launching new trade courses and
discontinuation o f those in l o w demand, (iv) revision o f existing curricula with significant involvement o f
industry, (v) establishment o f workshopsAaboratories for new trade courses in I T I s to be upgraded and for
advanced training modules in Centers o f Excellence, (vi) increased utilization o f learning resources and
media, and (vii) filling instructor vacancies and appointing additional instructors as needed.
15. Institutions adopting the Center o f Excellence (COE) approach will focus o n upgrading an individual
industrial sector that meets the high quality craftsmen needs o f the dominant local industry. The COE
approach provides multi-entry and multi-exit pathways for students to get training, and this involves
conducting: (a) broad-based multiskilling modules during the first year (semesters 1 and 2), (b) an
advanced module during the first h a l f o f the second year (semester 3), and (c) a specialized module
through relevant industry attachment during the second h a l f o f the second year (semester 4). For a given
sector, the curricula for the first year’s broad-based training and for the advanced module will be common
in all the ITIs offering courses in that sector. Trade testing for these modules will be done at the national
level under the aegis o f the National Council for Vocational Training (NCVT). Testing and certification
for the specialized module will be carried out jointly by the State Council for Vocational Training
(SCVT) and industry, and the certificates awarded for the fourth semester will be recognized by the
NCVT. ITIs that opt t o establish a trade-specific COE will also be financed to upgrade training facilities
in related trades.
16. I T I s not wanting to adopt the COE model may instead opt to upgrade training facilities for
conventional trades that are in high demand locally. N e w trades could also be introduced but only if lowdemand trade courses are discontinued. Sectors that I T I s are likely to focus o n for upgrading include
automotive, electrical and electronics, garments, IT, and other sectors for which there i s a significant
demand in the local labor market. Financing in these I T I s will normally be for a total o f 6 trades inclusive
o f existing and new trades.
17. All project I T I s will establish Training, Counseling and Placement Cells (TCPC) to secure: (a)
industry attachments for the C O E students for the specialized module, (b) training for IT1 graduates,
either as apprentices or otherwise, and (d) employment for the IT1graduates. The TCPC will be managed
by a Training, Counseling and Placement Officer (TCPO), who will be an existing faculty in each IT1
(e.g. Vice-principal or Group Instructor), workmg on this additional responsibility o n a part-time basis.
The TCPO will responsible for increasing institute-industry interactions to the advantage o f both the
3
After Project Effectiveness, eligible I T I s f r o m this first set o f 100 m a y apply for additional finding over and
above the amounts already allocated t o them by the DGE&T t o undertake improvements in training facilities. Such
additional requests will be considered by the National Steering Committee (NSC) based o n the merit o f their
Institutional Development Plans (IDPs).
33
students and instructors in the form o f industry visits, industry attachments, expert lectures and training,
job fairs for campus recruitment, etc. The TCPO would be suitably compensated for h i s h e r extra time
inputs.
Sub-Component 1.2: StrengtheningInstructor Training
18. There are close to 60,000 instructors in ITIs and ITCs, a significant majority o f whom have not been
trained recently. Training capacity i s currently limited to 1,100 places per year for basic (entry-level)
training o f instructors in seven centrally funded institutions - 5 Advanced Training Institutes (ATIs)
located at Howrah, Hyderabad, Kanpur, Ludhiana and Mumbai; the Central Training Institute (CTI) at
Chennai, and the National Vocational Training Institute (NVTI) for Women at Noida. The system’s
instructor training capacity will be expanded by:
Establishing 10 Instructor Training Wings (ITWs) in selected Project ITIs t o provide an additional
1,000 places for the basic (entry-level) instructor training, and improving training facilities in the
seven centrally funded institutions already conducting this type o f training. The basic (entry-level)
training will be o f 12 month duration, and will be targeted at instructors who have been in the system
for less than five years, and have not received any such training. The training will be accredited by
the National Council for Vocational Training (NCVT);
Starting refresher training courses for instructors in 20 selected COEs - this training targets
instructors who have been in the system for more than five years. The training will be o f four weeks
duration, and the participants will be awarded a certificate o f completion ;
Organizing training for would-be COE instructors at 11 centrally-funded institutions - AH1 at
Bangalore; the six ATIs; two ATI-EPIs; FTI at Bangalore, and NVTI at Noida. This training, o f 10
week duration, will be focused on upgrading the skills o f instructors identifiedrecruited for
placement in a COE. The training institutions will award certificates to instructors participating in the
program; and
Organizing highly specialized training o f instructors in publicly-funded organizations outside the
ambit o f the MOLE,and also in privately-funded training organizations and industry training centers.
19. The selection o f States for establishing an ITW or for providing refresher training for instructors in its
COEs, or for both will be competitive. Eligible States will need to submit proposals to the NSC to justify
why they have a comparative advantage in the training o f trainers. The proposal will provide details
about the would-be-host ITI’s qualifications, experience and adequacy o f i t s trainers, training facilities
and accommodations for instructor trainees, and sustainability o f the proposed model. Proposals will be
vetted by the NSC against objective criteria to ensure selection o f the best proposals.
20. In the States selected for this purpose, the host I T I s will receive additional financial allocations based
on selection and funding criteria to be determined by the NSC. The total funding to establish an ITW will
be limited to Rs. 20 million (USD 440,000 equivalent) to cover the costs o f additional classrooms and a
50-seat instructor-trainee hostel, fees for guest faculty, honoraria to existing instructors for extra time
spent conducting training programs, and additional training costs. Similarly, existing centrally-funded
institutions and host COEs will be provided funds for additional equipment, additional training costs, fees
for guest faculty, and honoraria to existing instructors involved in instructor training. T h e ITWs, COEs
and the centrally-funded institutions are expected to l e v y training fees for both the in-state and out-ofstate instructor trainees; the fees would be determined in consultation with the N C V T .
21. For bringing about system-wide improvements in the quality o f teaching, instructors in all the ITIs
(including project ITIs) in each project State will, during the project life, be provided either the basic
training or refresher training as per the individual instructor’s assessed training needs. T h e Project will
finance all such instructor training through the SPIUs.
34
22. The Apex Hi-tech Institute (AHI) at Bangalore, an existing centrally-funded institution, will be tasked
to manage and promote instructor training within the network o f training institutions called the Instructor
Training Network (ITN) - which comprises o f 10 ITWs, 11 centrally-funded institutions, and 20 COEs as well as with reputed training establishments outside the ITN. T o meet this management function, the
AH1 will: (a) develop and maintain a database o f instructors, (b) undertake training need analysis o f
instructors, (c) develop curricula for the 3 types o f instructor training programs (basic, refresher and
advanced), (d) organize training o f instructors within and outside the ITN, (e) review the basic (entrylevel) training o f instructors in terms o f duration and responsiveness to the needs o f new instructors, and
recommend changes to the N C V T as necessary, (0 set norms and standards for the different types o f
instructor training, and (g) carry out periodic inspections to ensure that training network institutions
adhere to the prescribed training norms and standards. The AH1 will also prepare brief Annual Training
Plans, and through the NPIU share them with the World Bank for review by July 31 o f each year. The
Plan will give a schedule o f training programs to be conducted by each ITN institution and the number o f
instructors that are expected to benefit from each program. T h e Plan will also state the number o f
instructors that would be given specialized training in reputed training establishment outside the ITN.
AH1 will be strengthened to perform the above stated management functions.
23. As a result o f these initiatives, it i s expected that the annual training capacity o f the system will
increase significantly - the number o f entry-level trainees will increase to 2,000 from 1,100 and refresher
courses would be provided to about 10,000 instructors. In addition, infrastructure will be created to train
about 3000 COE instructors per year.
Sub-component 1.3: Incentive Fund
24. The Incentive Fund i s designed to provide additional funding in the form o f grants to those
Statedunion Territories (UTs) that have performed well. T o ensure objectivity o f the selection process,
several quantifiable criteria will be used to judge performance: (a) the proportion o f a S t a t e m ’ s
allocation that has been utilized; (b) the proportion o f IT1 entrants that obtain NCVT certification; (c) the
proportion o f pass-outs finding employment within 12 months o f training completion; (d) the proportion
o f relevant instructor vacancies that are filled in participating ITIs; and (e) the proportion o f instructors
who have received training.
25. N o more than 20 awards (additional allocations) will be given to States over the life o f the project,
with the maximum amount for an award limited to US$2 million. The best performing S t a t e m s will be
invited by the N S C to submit proposals for consideration by the NSC. Invitations will be sent to the
relevant StateAJTs on two occasions: (a) in Year 3, when about 50 percent o f the awards will be given,
based o n assessments o f the performance o f States/UTs in Years 1 and 2 o f the project, and (b) in Year 4
when the remaining awards will be given based on performance over the three previous years. A
State/UT may be invited to apply for an allocation on either or both occasions.
26. Examples o f proposals that may be submitted by States include: conducting medium-term training
programs in emerging and/or export oriented s k i l l areas and, short-term training programs for practicing
artisans and unemployed youth in both Project and non-Project ITIs; strengthening o f training facilities in
non-Project ITIs; providing advanced training o f instructors in specialized institutions; and translating
instructional media packages into regional languages.
Component-2: Promoting Systemic Reforms and Innovations [Total: US$30 million, IDA: US$29
million]
27. Component 1 above, aims to rapidly improve the quality and relevance o f the public vocational
training system. However, systemic reform o f the entire system i s a long-term process. Reforms and
35
innovations need to be carried out to bring about improvements in the vocational training system and to
sustaining gains made under the Project. T h i s Component focuses on activities that will lead to the
design and ultimate implementation o f some o f these reforms. T h e DGE&T will have responsibility for
implementing these activities in collaboration with States, industry associations, non-government
organizations (NGOs) and private training providers.
Sub-component 2.1: Promotion of Reforms
28. T w o groups o f activities have been selected to promote reforms: (a) studies designed to develop
viable proposals for reforms, and (b) study tours and short-term fellowshp programs to enhance the
capacity o f the policy makers and system managers to implement reforms.
29. Four key areas presently identified by policy makers as critical to the reform process are briefly
described below. Additional studies will be identified over the course o f project implementation:
0
0
Developing a National Vocational Qualification Framework (NVQF) to provide uniform procedures
for determining the pre-requisites for entry into different training courses and programs, for assessing
competencies o f trainees, and for certifying slulls;
Developing a framework for registering private training providers and the courseslprograms offered
by them that meet N V Q F standards, and for instituting periodic inspection o f all institutions for
renewindwithdrawing their registration with the NCVT;
Developing replicable models for training o f the informal sector workforce in ITIs, polytechnics,
training establishments o f the Central and State governments, public sector undertalungs (PSUs),
industries and private sector training establishments. The findings o f this study will feed into the
MOLE’SModular Employable Skills (MES) program and the National Mission for Skills;4 and
Assessing the feasibility o f establishing a Training Fund - with resources mobilized from Central and
State governments, students, PSUs and industry to finance formal vocational training programs in
both ITIs and ITCs on the basis o f their performance, and to provide incentives for employers to
provide in-service training to their newly hired and current employees.
--
30. Foreign study tours and short-term fellowship programs will be organized by the NPIU to study
policies and best practices in areas related to vocational training. Study tours and fellowships will target
senior staff o f MoLE, DGE&T, States, NPIU, SPIUs, centrally funded institutions under the
administrative control o f MoLE, and senior representatives o f industry associations. Areas o f interest
include private-public partnerships; financing o f vocational training; curriculum development especially
in emerging technologies; development o f training standards and techniques for benchmarking;
assessment and certification o f slulls o f the informal workforce; and development and production o f
learning resources. Industry representatives will pay their own way on study tours. The NPIU will share
proposals for all foreign study tours and fellowship programs with the World Bank to obtain i t s ‘no
4
Concurrently with this Project, Go1 i s embarking o n a major centrally-financed scheme ($150 million initial
allocation from GoI) known as Modular Employable Skills (MES). MES i s designed for training workers in, and
entrants to, the informal sector. Trainees w i l l be able to develop skills (or, more appropriately, competencies) that
can be individually certified and packaged in whatever way i s relevant to the individual’s needs. Eventually, the
training i s to be provided b y the registered public, private and non-profit training organizations. . I t i s expected that
ITIs, using the resources (equipment, materials and instructors) developed under this Project, will be in a position to
put M E S courses in place on a demand-basis. In addition, the competencies developed under M E S will be strongly
influenced by the curriculum development advances made under the Project. Trainees under the M E S w i l l be able
to accumulate competencies that add to a complete CTS certificate.
36
objection’ and, will thereafter coordinate and monitor their implementation. The NPIU will disseminate
findings and lessons learned from all international programs through the DGE&T website.
Sub-component 2.2: Innovations Fund
31. The Fund will support the piloting o f innovative activities that would significantly improve the
quality o f the vocational education and training system. Activities that could be supported by this Fund
include but will not be limited to: (a) pilot interventions to implement and assess the impact/acceptability
o f systemic reforms (identified under Component 2.1 above); (b) developing web-based training
programs and materials and using EDUSAT to deliver vocational training by distance-learning modes; (c)
piloting methodologies for training in new/emerging technology areas; (d) developing a system for
comparing Indian training standards with international ones; and (e) developing new delivery systems for
informal training.
32. Financing from the Innovations Fund (specifically earmarked under the Project) will be available to
the DGE&T, States, centrally-funded institutions under the administrative control o f MOLE,employers’
associations and private training providers. Preference would be given t o proposals that involve publicprivate partnerships. The maximum award for piloting innovative activities will be $1 million.
33. Proposals seeking financial assistance under this Fund will be shared with the World Bank for review
before the NPIU tables them for consideration by the NSC. The NSC will review and select proposals,
giving consideration to the wider applicability o f activities being proposed. Funds cannot, for example,
be used to finance the training needs o f just one organization, but they could be used to finance the
development work o f that organization for subsequent wider public distribution. In comparing proposals,
N S C will consider: (a) the extent to which a proposal has been developed in collaboration with other
stakeholders-- both public and private; (b) the extent to which a proposal furthers the objectives o f
vocational training either nationally or within a S t a t e m [the procedure for selection o f proposals i s
detailed in the PIP].
Sub-component 2.3: Strengthening Capacityfor Development of Curricula and Resource Materials
34. Three centrally-funded institutions will be strengthened for long-term sustainable development o f
vocational training through: (a) establishment o f mechanisms for periodically updating the curricula and
learning resources o f NCVT-affiliated trades and instructor training, (b) development o f sound
assessment and testing procedures for both students and instructors, and (c) development o f student
training standards that match international benchmarks.
35. AH1 will be strengthened to: (i)develop curriculum inputs in emerging technologies for use in
updating curricula o f NCVT-affiliated trades, (ii)
benchmark vocational training against international
develop curricula for the 3 types o f instructor training programs described under substandards, (iii)
component 1.2, and (iv) assess the feasibility o f reducing duration o f entry-level training for instructors.
AH1 staff will be exposed t o international best practices, and i t will be provided funding to use the
services o f international consultants and experts.
36. T h e Central Staff Training and Research Institute (CSTARI) at Kolkata will be supported to help i t
adopt modem curriculum development methodologies and update i t s curricula with inputs from
employers to ensure the continued relevance o f curricula. CSTARI will also develop procedures for
evaluating COE students’ achievement on the specialized module to ensure uniform joint assessments o f
student competencies by States and industry. CSTARI will utilize services o f local consultants, and its
staff will be exposed to international practices.
37
37. The capacity o f the National Instructional Media Institute (NIMI) at Chennai will be strengthened t o
develop, print/publish and disseminate instructional media packages (IMPS). NIMI will develop question
banks for assessing and evaluating trainees o f conventional and COE trade courses, design self-learning
packages for students and instructors, and train instructors in the use o f IMPs.
Component-3: Project Management, Monitoring and Evaluation [Total: US$28 million, IDA:
US$23 million]
Sub-component 3.1: Project Management
38. At the central-level, the Project will be guided by a National Steering Committee (NSC), with
significant senior-level representation from industry and industry associations. The NSC, chaired by the
Secretary o f MoLE, will also select States and institutions, and allocate funds for various activities to the
DGE&T, States, centrally funded institutions and others. I t will be assisted by a National Project
Implementation Unit (NPIU), headed by the National Project Director (NPD) who will have the rank o f a
Joint Secretary in the M o L E . The overall responsibility for policy decisions and project management at
the central-level will be vested in the NPD. The NPIU will have 5 functional units with adequate full-time
officials, consultants and staff (see Annex 6). It will be granted sufficient functional, financial and
administrative autonomy to enable it t o carry out its responsibilities without having to seek frequent
approvals from the NPD.
39. At the State level, the Project will be guided and facilitated by a State Steering Committee (SSC),
headed by the Principal Secretary/Secretaryfor vocational training. The SSC will have significant
representation f r o m industry and industry associations. The SSC will be assisted by a State Project
Implementation Unit (SPIU) with adequate full-time officials, consultants and support staff (see Annex
6) *
40. At the institutional level, each participating IT1 will have an Institutional Management Committees
(IMC) for the whole ITI, with significant participation f r o m industry. I t will be chaired by an industrialist.
The IMCs will be adequately empowered in academic, administrative, financial and management matters
to discharge their functions as listed in the Memorandum o f Understanding (MoU) between the DGE&T
in the M o L E and the States [ M o U i s detailed in the PIP].
Sub-component 3.2: Monitoring and Evaluation
41. The Project provides for an effective monitoring and evaluation system to: (i)
monitor the use o f
resources; (ii)
assess implementation progress o f various Project elements as measured by intermediate
evaluate the impact o f the Project o n outcome indicators through impact
output indicators; and (iii)
assessments and thematic studies.
42. Project monitoring will be based on information assembled by the Management Information System
(MIS) (under development by the NPIU) and through field visits. Institutions, SPIUs and the NPIU will
regularly keep the M I S updated. All project ITIs will establish facilities for linkmg to the central M I S and
keeping i t periodically updated. Each SPIU will cany out, against a simple checklist, at least one field
inspection annually o f its project institutions. NPIU staff will also undertake periodic visits to States and
participating institutions.
43. At the national level, project implementation will be reviewed periodically by the NSC, and at the
state-level, the SSC will perform a similar function. Implementation progress will also be monitored
semi-annually and at the mid-term, jointly by the Go1 and IDA. The NPIU will present State-wise
analyses and findings during these reviews. The joint reviews will include visits to selected institutions
38
and interactions with stakeholders such as the private sector, students and teachers. These reviews will
help identify problem areas and suggest remedial actions that need to be undertaken at different levels.
The Mid-TemReview (MTR), besides assessing project progress, will also suggest corrective actions that
may be needed to enhance the pace o f implementation and achievement o f project development
objectives. The Go1 and IDA will also jointly undertake an Implementation Completion Review (ICR)
mission to assess the overall achievements o f the Project.
44. The Project will be evaluated at the mid-term and end-term. The NPIU will be responsible for
developing TORS for these evalutions, contracting the evaluation entity and supervising the work
will be shared with the World Bank for i t s review, and “no objection.” Evaluation
undertaken. The TORS
track improvements in the employment and wage outcomes o f IT1 graduates;
results will be used to: (i)
(ii)study institution-to-work transitions o f trainees over a two-year period after graduation; (iii)gwe
N C V T /CSTARI/ AH1 feedback from graduates on the relevance o f training provided and areas for
curriculum improvement; and (iv) evaluate the impacts o f institution-level reforms and institutional
upgradation o n employment and earnings o f graduates relative to a comparison group o f trainees not
benefiting from the Project, and as compared to their own pre-Project IT1baseline averages. In addition,
thematic reviewskudies for identifjmg emerging sectors, s k i l l mix requirements, and employer surveys
will also be undertaken.
III.Selection of StatesRJTs and Institutions
45. The success o f the Project depends critically on two conditions. Firstly, the States’ willingness to
undertake the needed reforms in institutional management, and secondly, the ability and willingness o f
project institutions to implement their development plans by exercising the given autonomies through
their IMCs. These two conditions make it necessary that the States be selected first, followed by the
institutions they then sponsor.
Eligibility o f StatesRJTs
46. States/UTs desirous o f joining the Project shall submit their proposals in a prescribed format, stating
the activities they plan to undertake under the Project. They shall also demonstrate their commitment and
preparedness to meet the eligibility criteria for participation by signing an M o U with the DGE&T in the
MOLEwell before the institutional selection takes place. The eligibility criteria to be met and adhered to
throughout Project life are:
Maintaining and ensuring active and effective industry participation in the State Council for
Vocational Training;
0
Establishing a State Steering Committee with significant participation from industry;
0
Establishing and maintaining a State Project Implementation Unit with adequate s t a f f and financial
and administrative autonomies to discharge i t s functions without frequently seelung approvals from
State authorities;
Agreeing to constitute an Institute Management Committee (IMC), with significant participation from
industry, for each IT1selected to participate in the Project, and granting the I M C sufficient autonomy
to perform i t s functions (as listed in the M o U given in the PIP);
0
Agreeing to grant financial and administrative powers to the Principals o f Project ITIs (as stated in
the MoU) to undertake procurement, refkbishment and maintenance activities as required for speedy
project implementation;
0
Agreeing to ensure implementation o f the recommendations made in the Environment Management
Framework (EMF) and the Equity Assurance Plan (EAP) by each Project ITI;
Agreeing to fill all existing instructor and technical staff positions, and ensuring that instructor
vacancies do not exceed 10 percent o f respective sanctioned positions; and
39
Agreeing t o sanction all additional positions required by each Project IT1 in accordance with their
respective Institutional Development Plans (IDPs).
Eligibility o f Institutions
47. T o be eligible for selection into the Project, an IT1 from an eligible State should meet the following
criteria:
0
It must have an effectively functioning I M C f o r the entire institution with sufficient autonomy t o
perform its functions (as listed in the MoU given in the PIP);
0
There should be a regular full-time Principal in place with adequate financial and administrative
powers (as stated in the MoU) t o undertake procurement, refurbishment and maintenance activities as
required for speedy project implementation:
Instructor vacancy should not be more than 10 percent o f the sanctioned positions in the whole ITI.
It should have proper surroundings, sufficient space for landscaping, buildings with adequate space
for additiondalterations and other infrastructural facilities;
It should b e w e l l connected by road /railway; and
0
I T I s desirous o f being selected as a Center o f Excellence should be located in or close to an industrial
area with a critical mass o f industries related to its chosen industrial sector.
Selection of Institutions
48. O f the 400 institutions t o be supported under the Project, the first set o f 100 ITIs has already been
selected jointly by the States and the DGE&T t o establish COEs-these I T I s have commenced their
project operations since August 2006. The remaining 300 I T I s will be selected competitively based on
their eligibility and their IDPs through a maximum o f two selection cycles
49. T o provide a level playing field, all the eligible I T I s (from the national stock o f 1896 ITIs) will be
trained, well before Project commencement, by master trainers in development o f quality IDPs. The I T I s
interested to participate in the Project will develop their IDPs under the guidance o f their respective IMCs
and through consultation with stakeholders (local representatives o f industry associations, faculty
members, students and the community). The IDPs would define the long-term goals o f the institution, the
issues and challenges facing the institution and the strategies for dealing with them. Each IDP will set
targets for institutional improvement, define performance indicators, explain h o w each IT1 i s going to
assist graduates in obtaining employment (through a placement cell or j o b fairs) and detail the annual
financial requirements. The prescribed IDP format i s given in the PIP.
50. The SSCs will evaluate IDPs from institutions in their State [guidelines for IDPs are provided in the
PIP] and recommend to the N S C the ones t o be included in the Project and the quantum o f funds to be
provided t o each o f them. The evaluation process will take into account issues including: the availability
o f a functioning I M C for the entire institution; the extent to which the IDP meet the needs o f the local
economy; consideration given to gender, stakeholder participation, and social equity issues; extent to
which financing sought i s realistic and whether the institution has adequate absorptive capacity; and
whether the IDP proposes to leverage private sector financing to complement public support. The final
selections and fund allocations will be made by the NSC, and the decisions, beneficiaries and successful
IDPs will be posted o n the DGE&T website. SSCs will advise unsuccessful ITIs o n h o w t o improve their
proposals for submission in a subsequent round o f competition.
40
Annex 5: Project Costs
INDIA: Vocational Training Improvement Project
Project Cost By Component
Local
US$M
276
26
26
Improving Quality o f Vocational Training
Promoting Systemic Reforms and Innovation
Project Management, Monitoring and
Evaluation
Unallocated
Total Base Line Costs
Physical Contingencies
Price Contingencies
Total Project Costs'
Total Financing Required
I
I
15
3
2
Total
US$M
29 1
29
28
10
338
1
21
11
359
338
338
21
21
-
Foreign
US$M
359
359
Identifiable taxes and duties are built into the project costs.
1. Physical contingencies and price contingencies are built into the project costs.
2. The States/UTs, which meet the eligibility criteria, will be funded by the project. A total o f 400
Industrial Training Institutes (ITI) will be funded. These I T I s will be selected on a competitive basis. In
addition to 400 ITIs, the project will fund 14 centrally funded institutions (6 ATIs, 2 ATI-EPIs, 1 FTI, 1
CTI, 1 NVTI, 1 Apex Hi-Tech, 1 CSTARI, 1 NIMI), establish 10 ITWs, and training centers for advanced
module instructors in 20 COEs), National Project Implementation Unit and State Project Implementation
Units.
3. T h e maximum funds that could normally be provided to an IT1establishing a CoE i s US$ 800,000 (or
US$ 450,000 (or equivalent o f
equivalent o f INR 35 million), which i s comprised o f two elements; (i)
INR 20 million) for establishing the CoE itself, and (ii)
US$ 350,000 (or equivalent o f INR 15 million)
for upgrading related trades. Funds for upgrading an IT1will be normally a maximum o f US$450,000 (or
equivalent o f INR 20 million).
4. The total additional funding to an IT1 to establish an ITW will be limited to US$ 450,000 (or
equivalent o f INR 20 million) to cover the costs o f additional classrooms and a 50-seat instructor-trainee
hostel, fees for guest faculty, honoraria to existing instructors for extra time spent for conducting training
programs, and additional training costs.
5. Decision about allocation o f external funds i s guided by the following principles: (1) respective
external funds will be additional to, not
state/UT will share 25% o f the total costs for the s t a t e m ; (ii)
substitute for, domestic funds; (iii)estimation o f needs o f the states/UTs i s based o n the approved
Institutional Development Plans submitted by the eligible ITIs.
6. Out o f the total project costs, n o more than 25% could be spent on civil works.
41
Annex 6: ImplementationArrangements
INDIA: Vocational Training Improvement Project
1. This i s a centrally coordinated multi-state Project. I t will be implemented by the Directorate General
o f Employment & Training (DGE&T) in the Ministry o f Labor and Employment (MoLE) along with all
the participating States and Union Territories (UTs). At the M o L E level, the Project will be guided and
managed by a National Steering Committee (NSC) assisted by a National Project Implementation Unit
(NPIU), and at the State level, by State Steering Committees (SSCs) assisted by their respective State
Project Implementation Units (SPIUs). T h e NSC will also provide overall policy directions for project
activities and for initiation o f systemic policy reforms.
I.
National-Level Project Management and Implementation
2. T h e two bodies, the NSC and the NPW, responsible at the central level for implementation,
coordination and management o f the Project are briefly described below.
National Steering Committee
3. The Ministry o f Labor and Employment (MOLE) will constitute a 7-member National Steering
Committee (NSC), composed as below:
Secretary o f the Union Ministry o f Labor & Employment, as the Chairperson;
The Financial Advisor to M o L E (or h i s h e r nominee),
Three industry representatives, nominated one each by the Confederation o f Indian Industry (CII),
Federation o f Indian Chambers o f Commerce and Industry (FICCI) and Association o f Chambers o f
Commerce and Industry (ASSOCHAM);
Three members nominated by GoI, who must be persons with particular expertise and interest in
vocational training; and
The National Project Director in the MoLE, as the Member-Secretary.
4. The Deputy Director General in the DGE&T, and Chairpersons o f some SSCs may also be invited to
the NSC meetings. The NSC will meet quarterly. Special meetings may also be convened by the
Chairperson. I t will be assisted in its functioning by the National Project Director (NPD). The operational
costs o f the NSC, including sitting fees for industry representatives, will be financed by the Project
through the NPlU’s budget.
5. The NSC, besides providing guidance and directions to the Project for maximizing gains f i o m the
Project, will: (a) select StatesLJTs and their sponsored ITIs for participation in the Project and decide
their respective fund allocations, (b) take corrective actions with regard to the non-performing Statesms,
(c) allocate funds for strengthening o f centrally funded institutions covered under the Project, based o n
their detailed proposals, (d) select proposals for funding from the Incentive Fund and the Innovations
Fund and decide allocations for the awardees, (e) approve international study tours and short-term
fellowship programs, (f) review findings from pplicy reform, thematic and evaluation studies, and (g)
approve Annual Work Plan and Budget o f the NPIU.
National Project Implementation Unit
6. National Project Director: T h e NPIU will work under the guidance o f the National Project Director
(NPD), as appointed by the M o L E in the rank o f a Joint Secretary to the Government o f India. The NPD
42
will be responsible for overall project fund management; coordination with Project StatesLJTs, concerned
Ministried Departments o f Go1 and the World Bank; overseeing project implementation at the Central
and State levels; periodically reviewing project progress; facilitating holding o f semi-annual Joint Review
Missions and other implementation support missions, facilitating smooth and efficient working o f the
NPIU and ensuring adequate staffing o f the NPIU with appropriate expertise at all times during the
Project life.
7. The NPD will be assisted by one full-time coordinator in the rank o f Director in the MoLE. As
illustrated in the NPIU organogram, the coordinator designated as the National Proiect Coordinator (NPC)
will guide, coordinate, manage and monitor all Project activities, except for the Sub-component 2.1,
through 4-6 functional units (Procurement Unit, Finance Unit, Institutional Development Unit,
TraininglAcademic Unit and Monitoring & Evaluation Unit). The Deputy Director General (DDG) in the
DGE&T, in his capacity as the Policy Development Coordinator (PDC) will be directly responsible for
managing Policy Reforms (sub-component-2.1) o f the Project. A Policy Development Unit will be placed
under hindher, with an officer not below the rank o f a Deputy Director, who will in turn be assisted by
contracted staff7 consultants.
8. Structure ofthe NPIU: The various units supporting both the N P C and PDC will be staffed (with
deputed full-time officials from M o L E and, consultants) as shown in the NPIU organogram. The officer
responsible for the Institutional Development Unit will also be the nodal officer for Equity Assurance
Plan (EAP) and Environment Management Framework (EMF). Shehe will be assisted by a full-time
time consultant to develop training manuals/ materials on these aspects and provide training support to the
SPIU staff and ITIs. The Monitoring and Evaluation Unit will also functionally support the PDC. The
NPC will be empowered to recruit short-term and full-time consultants as required from time to time. The
Project will finance the salary cost o f only the full-time staff in the NPIU, fee to consultants, salaries o f
contractual support staff, expenditure on rent and refurbishment o f hired offices, goods, study tours and
fellowship programs and training workshops, travel and other operating costs o f the NPlU.
9. Functions ofthe NPIU: T h e key functions o f the NPIU will, among others, include:
e
Guiding States in preparation o f Institutional Development Plans (IDPs);
e
Preparing Annual Work Plan & Budget for the NPIU, Annual Project Budget, and quarterly Interim
Unaudited Financial Reports (IUFRs);
e
Training and guiding States and ITIs in proper financial practices and procedures as contained in the
Financial Management Manual (FMM);
e
Training States and I T I s in procurement as per the procedures and methods contained in the
Procurement Manual for ensuring compliance with Bank financial management and procurement
arrangements as agreed with the GoI;
e
Ensuring timely release o f funds to States, submission o f audit reports, and submission o f
reimbursement claims;
e
Building capacity o f the StatesRJTs and institutions for implementation o f the EAP and EMF for
ensuring compliance;
e
Developing a Management Information System (MIS) for the Project, instituting it in the NPIU,
SPIUs and ITIs, and organizing training o f all the concerned personnel in proper use and maintenance
o f the MIS;
e
Publishing results o f all selections, and findings o f studies on the DGE&T website;
e
Organizing international study tours and fellowship programs;
e
Building capacity o f SPIUs and IMCs in project and institutional management;
0
Preparing TORSfor various studies to be carried out, organize the studies, and share the findings o f
the studies with NSC and the World Bank;
e
Periodically monitoring progress o f project implementation at the Central and State levels;
43
Preparing quarterly project progress reports for review by the NPD and the NSC; and
Preparing semi-annual review reports for use in the Joint Review Missions (JRMs), organizing the
J R M s and other implementation support missions in Project States, arranging visits o f Mission
members to Project institutions, and organizing interaction meetings with all the stakeholders.
10. Responsibilities of the National Project Coordinator: T h e NPC will provide support to the NPD and
will be directly responsible for carrying out the functions listed below:
Preparing annual work plans, including annual budgets and detailed semi-annual plans and budget;
Selecting (with the approval o f the NSC), managing and arranging training for NPIU staff;
Considering and authorizing proposals for local technical assistance for activities undertaken at the
national level;
Considering proposals for and subsequently procuring international technical assistance for activities
undertaken at both national and state levels;
Arranging international study tours involving national or state level participants;
Liaising with stakeholders (local and foreign) involved in the Project;
Arranginglorganizing periodic workshops for SPIUs to discuss progress with the project and to
[email protected] and solve emerging problems;
Ensuring effective transfer o f knowledge and lessons learnt to the counterparts within MOLEand
across ministries;
Ensuring that any services that can ensure more efficient performance o f the project have been
provided;
Submitting annual plans and budget, quarterly progress report to the NSC;
Organizing joint review missions and other supervision and implementation support mission, as
required; and
Carrying out related tasks as may be requested by the NPD and the NSC.
11. Responsibilities of NPIU’s Financial Management Unit: Under the guidance o f the NPC and direct
guidance o f the concerned Joint Project Coordinator (JPC), the Financial Management Unit (FMU) will:
Manage the funds provided for national level activities under the Project, including monitoring
project accounts and costs. The procedures for this are described in detail in the Financial
Management and Procurement Manual;
Ensure full knowledge and systematic application o f the World Bank’s procedures and requirements
for financial management. Guide the operations o f Finance Officers in SPIUs through providing
advice and operating a clearing house for issues (problems and solutions) raised by States/UTs. A c t as
a support and reference person for all project-related financial management tasks;
Prepare annual estimates and budget for the project;
Ensure timely release o f funds to states as per project norms;
Ensure maintenance o f project accounts as per standard procedures;
Prepare consolidated project level IUFRs and ensure timely submission o f IUFRs t o the Bank;
Timely preparation and submission o f monthly/quarterly claims for reimbursement;
Coordinate receipt o f annual audit reports from states and audit o f NPIU. Prepare and submit
Consolidated Audit Report to the Bank on a timely basis. Ensure timely compliance o f audit
observations by the NPIU and coordinate timely response from States on audit observations;
Participate in reviews and monitoring o f States; and
Prepare and implement a plan for capacity building in financial management o f the FM staff in SPIUs
and review the capacity building requirements o f FM staff at all levels on a regular basis e.g.,
annually.
44
12. Responsibilities of NPIUs Procurement Management Unit: Under the guidance o f the NPC and the
direct guidance o f the concerned JPC, the Procurement Management Unit will:
0
Ensure full knowledge and systematic application o f the W o r l d Bank’s procurement guidelines and
provide guidance on queries from States and I T I s regarding W o r l d Bank’s procurement policies;
0
Manage the procurement o f goods and consultancies required for national level activities under the
Project and manage the procurement o f international goods and consultancies;
0
Arrange procurement through International Competitive Bidding;
0
Build capacity o f procurement officers in SPIUs and I T I s to procure in accordance with the Bank
procurement guidelines;
Review the procurement documents and certify technical specifications before forwarding the
documents t o the Bank for prior review;
0
Facilitate post-review, which may be conducted by the W o r l d Bank; and
0
A c t as a support and reference person for all project-related procurement tasks.
13. Responsibilities of NPIU’s Institutional Development Unit: Under the guidance o f the NPC and the
direct guidance o f the Concerned JPC, the Institutional Development Unit will:
Orient the SPIUs and I T I s o n the structure and methodologies o f preparing institutional development
proposal, and institutional selection criteria;
Review funding requirements from the institutions and the States/UTs;
Raise stakeholders’ awareness o f the Project objectives and eligibility criteria for financing;
Evaluate Institutional Development Plans;
Develop guidelines and modules for capacity building o f Institutional Management Committees
(IMC)s and conduct a few regional workshops t o orient SPIUs, institutions and IMCs;
Evaluate performance o f I M C s and disseminate good practices;
Organize training for SPIU officials and IT1principals o n institutional management;
Organize workshops at national and regional levels for sharing o f good practices o n IMCs,
institutional development, and innovations; and
Develop and oversee procedures for undertaking quality audits o f institutions participating in the
project .
14. Responsibilities of NPIU’s AcademidTraining Unit: Under the guidance o f the NPC and the direct
guidance o f the concerned JPC, the Training Unit will:
Organize and facilitate knowledge and skills upgradation trainings for principals and instructors;
0
Organize and facilitate foreign trainingshtudy tours for policy makers, managers, administrators,
principals and instructors;
0
Review the national level Annual Instructor Training Plan prepared by Apex Hi-Tech Institute at
Bangalore, and ensure synergy with training plans o f each S t a t e m ;
0
Facilitate strengthening o f central training institutions; and
0
Provide assistance on curriculum revision and refinement.
15. Responsibilities of NPIU’s Monitoring and Evaluation Unit: :Under the guidance o f the NPC and the
direct guidance o f the concerned JPC, the Monitoring and Evaluation Unit will:
Develop and maintain an appropriate labor market information system;
0
Develop, implement and maintain a project management information system;
0
Monitor and evaluate the internal operations o f the Project;
0
Guide the operations o f Monitoring and Evaluation Specialists in SPIUs through providing advice
and operating a clearing house for issues (problems and solutions) raised by States and UTs.
0
Incorporate baseline data on the performance o f institutions into the MIS;
45
0
Develop procedures for the regular monitoring o f performance o f project institutions-- this will
include procedures for assisting with ad hoc surveys (such a tracer studies and surveys o f employers’
attitudes); and
Conductkommission impact evaluation o f training programs and various types o f other studies, and
disseminate the findings.
16. Responsibilities of the Policy Development Unit: Under the direct supervision and guidance o f the
PDC, the Unit will undertake activities related to Promotion o f Reforms (sub-component 2.1) through:
Developing TORS for policy studies, hiring nationalhternational consultants to undertake studies,
and supervisingthe work o f consultants;
Organizing workshops with key stakeholders (across different ministries, the private sector and
NGOs) to disseminate interim findings and final reports;
Preparing progress reports on work undertaken for presentation to the NPD and the NSC; and
Developing policy directions that could be implemented in the medium and long-term for bringing
about systemic reforms in the Vocational Training System.
46
STRUCTURE OF THE NATIONAL PROJECT IMPLEMENTATION UNIT
Director
(Director)
Support Staff
11.
State-Level Project Management
17. The project StatesAJTs will be directly responsible for management, coordination, implementation
and monitoring o f the Project at the State level. The two bodies, the State Steering Committee (SSC) and
the State Project Implementation Unit (SPIU), responsible at the State level for carrying out these
responsibilities are briefly described below.
47
State Steering Committee
18. The State Department responsible for vocational training will constitute a 10-member State Steering
Committee (SSC), composed as below:
Principal SecretaryEecretary responsible for vocational training, as the Chairperson;
0
Financial Advisor/Financial Controller o f the concerned Department;
Chief Engineer o f the State P W D or his nominee not below the rank o f a Superintending Engineer;
Three industry members, nominated by major industry Associations;
0
Three members having knowledge o f and interest in vocational training, nominated by the State
Government; and
The State Project Director (who will be the State Director for vocational training), as the MemberSecretary.
19. The SSC will meet quarterly. Special meetings may also be convened by the Chairperson. I t will be
assisted in i t s functioning by the State Project Director (SPD). The operational costs o f the SSC, including
sitting fees for industry representatives, will be financed by the Project through the SPIU’s budget.
20. The SSC will be responsible for: (a) guiding the work o f the SPIU and authorizing reports to the state
government, to the NSC, and to the World Bank; (b) assessing and recommending the IDPs for financing
under the project; (c) overseeing operational activities within the state; (d) preparing applications to the
Incentive and Innovations Funds; (e) reviewing and approving the training plans for the staff o f SPIU and
the institutions, including foreign training; and (f) meet quarterly or more frequently, as required, to take
stock o f the project and facilitate project implementation
State Project Implementation Unit
2 1. The concerned department o f the S t a t e m government responsible for managing I T I s will establish a
State Project Implementation Unit (SPIU). The States with 10 or more project ITIs will put in place a fullfledged SPIU as suggested in the organogram below.
22. The Director o f vocational training dealing with I T I s will be designated as the State Project Director
(SPD), who will be assisted by an Additional State Project Director (ASPD). The ASPD will be involved
in day-to-day management, coordination, implementation and monitoring o f the Project. Under the ASPD
there will be four units-- Procurement, Financial Management, Institutional Development and Training,
and Monitoring and Evaluation (M&E). Each Unit will be under the charge o f a State government
official, not below the level o f an Assistant Director except the Finance Unit, which will be managed by a
Finance Officer.
23. The SPIUs managing 10 or more I T I s could hire three to four consultants to help the four Units based
on the needs o f the Units. A maximum o f two support staff could also be hired by the SPIU to support the
team o f professionals. W h i l e salaries o f the officers deputed in SPIU will be paid by the respective
StateAJT government out o f the State budget, the remuneration for consultants and the support staff hired
for the SPIU could be charged to the Project. The travel and other operating costs o f all staff and
consultants will be paid out o f the Project.
24. In the States with less than 10 project ITIs, the SPIU will be staffed with the SPD, the ASPD and two
Units functioning under the direct supervision o f the ASPD. These Units are: (i)
Procurement and
Financial Management, and (ii)
Institutional Development, Training and M&E. The incumbent o f these
48
Units will be officers not below the rank o f an Assistant Director in the State/UT. These StatesKJTs could
hire one to two consultants t o support the SPIU.
PROPOSED STATE PROJECT IMPLEMENTATIONUNIT (SPIU)
State Steering Committee
~
Director
(Additional Director)
(Assistant Director)
Development 8
Training Unit
(Finance Officer)
Evaluation Unit
(Assistant Director)
(Assistant Director)
25. Responsibilities of the State Project Director (SPD): The SPIU will work under the overall guidance
o f the SPD, who will perform the following functions:
0
Overall supervision of the management o f the State’s part of the Project;
Obtain clearances, if any, from higher level in the State Government;
Coordinate with the NPIU;
0
Furnish information t o the State government and the NPIU as well as to the DGE&T, as required;
0
Launch information campaigns and disseminate information on vocational training facilities within
the state for attracting students;
0
Convene the meetings o f SSC on behalf o f the Chairperson; and
0
Act as the ex-officio Member- Secretary o f the SSC.
49
26. Responsibilities of the Additional State Project Director (ASPD): Under the guidance o f the SPD, the
A S P D will:
0
Coordinate implementation o f the project and monitor progress o n a day-to-day basis;
0
Prepare project’s annual work plans, including operations and budgets;
0
Select (with the approval o f the SSC) and manage SPIU staff and ensure their proper training and
readiness;
0
Consider proposals for and subsequently procure local technical assistance for activities undertaken
the State level;
0
Mobilize resources to meet project’s technical assistance needs;
0
Liaise with stakeholders (local and foreign) involved in implementing the project;
Ensure the effective transfer o f skills to staff o f counterpart ministries;
Facilitate the provision o f required services to ensure efficient performance o f the project;
0
Ensure implementation o f EAP and EMF by project institutions, and ensure compliance;
Submit quarterly progress report to the SSC; and
0
Carry out related tasks as may be reasonably requested by the SSC.
27. Responsibilities of SPIU’s Procurement Unit: Under the direct guidance o f the ASPD, this Unit will:
0
Ensure full knowledge and systematic application, including by key staff o f the State Agency, o f the
W o r l d Bank’s guidelines for procurement o f works, goods and services;
0
Manage the procurement o f works, goods and consultancies required for State level activities under
the Project and manage the procurement o f international consultancies;
0
Execute procurement through National Competitive Bidding, as required by the project it is;
0
Liaise with the Procurement Officer in the NPIU, providing information o n issues (problems and
solutions) for the national clearing house;
0
A c t as a support and reference person to I T I s for a l l project-related procurement tasks; and
Submit quarterly procurement progress reports t o the SPD.
28. Responsibilities of SPIU’s Finance Unit: Under the direct guidance o f the ASPD, this Unit will:
0
Manage the funds provided for State level activities under the Project, including monitoring project
accounts and costs. The procedures for this are described in detail in the Financial Management
Manual;
e
Ensure full knowledge and systematic application, including by key staff o f the state Agency, o f the
W o r l d Bank’s procedures and requirements for financial management;
0
Liaise with the Finance Officer in the NPIU, providing information o n issues (problems and
solutions) for the national clearing house. A c t as a support and reference person for a l l project-related
financial management tasks;
0
Prepare annual estimates and budget for the project at State level and submit to NPIU;
0
Ensure timely release o f funds for project activities at the State level and in ITIs;
0
Ensure maintenance o f project accounts as per standard procedures in state office and in ITIs;
0
Prepare quarterly IUFRs and ensure timely submission o f these reports to the NPIU;
0
Timely preparation and submission o f monthly/quarterly claims for reimbursement to the NPIU;
0
Coordinate submission o f annual audit report fiom State to the NPIU and timely compliance o f audit
observations. If a system o f internal audit exists, ensure adequate coverage, scope and timely and
satisfactory response to observations by internal auditors; and
0
Reviews and monitor financial management arrangements for the project at ITIs.
29. Responsibilities of SPIU’s Institutional Development and Training Unit: Under the direct guidance o f
the ASPD, this Unit will:
50
Raise stakeholders’ awareness o f the Project objectives and eligibility criteria for financing;
Contribute to the work plans o f the SPIU;
Evaluate IDPs and provide written advice on them to the SSC;
Prepare, as required, applications to the Incentive Fund and Innovative Fund and provide them to the
SSC for consideration;
Undertake quality audits o f project institutions;
Implement and monitor EAP and EMF and report compliance to the SPIU;
Identify training needs in a participatory way and prepare plan for meeting the training needs o f the
institutions’ Principals and instructors, and implement the training plan under the guidance o f the
SPIU and the Apex Hi-tech Institute (AHI); and
Conduct orientation program for I M C members.
30. Responsibilities of SPIU’s Monitoring and Evaluation Unit: Under the guidance o f the ASPD, this
Unit will:
Keep the management information system (MIS) updated periodically at the State level;
Monitor progress in implementation o f various project elements on a day to day basis;
Liaise with the Monitoring and Evaluation Specialists in the NPIU, providing information o n issues
(problems and solutions) for the national clearing house;
Assist the Monitoring and Evaluation Specialist in the NPIU to incorporate baseline data on the
performance o f institutions into the MIS;
Implement and oversee procedures for the regular monitoring o f performance o f institutions
participating in the Project. This will include procedures for assisting with surveys such as tracer
studies and surveys o f employers’ attitudes;
Undertake regular field visits t o institutions and develop a simple monitoring checklist, and
consolidate quarterly monitoring reports based on the monitoring checklists; and
Propose corrective actions (if any) that need to be taken. These will be acted upon by the State
Project Director. The NPIU Monitoring and Evaluation Unit will be responsible for collating these
monitoring reports, and preparing semi-annual monitoring reports.
111.
Institutional Level Management
3 1. Each State will appoint an Institutional Management Committee (IMC) for each project IT1as per the
M o U signed by it with the DGE&T. The I M C will comprise up to I 1 members as below:
N o t more than five members appointed by the S t a t e m government;
N o t more than five local employers nominated by the national or local Industry Associations; and
Principal o f the IT1will be the ex-officio Member-Secretary.
32. The I M C will, among other functions listed in the MoU: (a) guide the preparation o f I D P for
submission to the SSC for being sponsored to receive funding under the Project, (b) guide preparation o f
proposals for funding under the Innovations Fund, (c) approve annual overall and project budget for the
ITI, (d) guide and supervise the Principal in implementing all aspects o f the institutional project, (e)
engage instructors on contract as per need, (0 assess instructors’ training needs, and sponsor the selected
instructors for appropriate training within the ITN institutions and outside, (g) ensure implementation o f
the recommendations made in the E A P and EMF, (h) approve proposals from the Principal for
review
procurements along with specifications at the institutional level and through the SPIU, and (i)
progress o f project implementation periodically.
51
IV.
R o l e o f the W o r l d Bank
33. IDA will perform i t s fiduciary responsibility through regular supervision o f all the aspects o f project
implementation and provide technical and implementation support as and when required. The details of
IDA supervision process, as agreed are:
Conduct jointly with the Go1 (through the DGE&T), semi-annual, mid-term and end-term Joint
Review Missions for monitoring overall progress and achievements in project implementation. Terms
o f References for each o f these reviews will be drawn up by the IDA and will incorporate suggestions
from the DGE&T;
Undertake, jointly with the DGE&T, on-site visits to States and I T I s for implementation guidance,
as required from time to time;
Undertake periodic stock-tahng o f project implementation progress with the NPDNIU;
Provide technical assistance and guidance to the NPIU as requested from time to time;
Provide technical assistance and guidance t o the centrally-funded institutions, SPIUs and I T I s in
collaboration with the NPIU, as required from time to time;
Carry out prior review o f and give ‘no objection’ to:
- Annual Instructor Training Plans, prepared by the Apex Hi-Tech Institute, by July 3 1 each year;
- DGE&T proposals for re-allocation o f funds from poor performing States to better performing
States;
- NPIU proposals for all foreign study tours and fellowship programs;
- Proposals seeking financial assistance under the Innovation Fund;
- TORSfor carrying out annual evaluation o f the project, management audit, and for conduct o f
various studies related to policy reforms, labor market outcomes, compliance with EMF and EAP,
etc. through independent local/ international consultant firms; and
- Contracts for Goods, Works and Services in accordance with the relevant provisions in the GoI’s
Procurement Manual for the project.
Carry out periodic post-review o f all contracts below prior review threshold limit;
Carry out review o f all cases o f extension o f bid validity and re-bidding and give ‘no objection’; and
Carry out review of:
- Financial Monitoring Reports; and
- Consolidated Audit Report for each financial year, and State specific audit reports as per need.
52
Annex 7: Financial Management and DisbursementArrangements
INDIA: Vocational Training Improvement Project
I. Financial Management Capacity Assessment
1. Financial Management (FM) capacity assessment o f the project included:
Visit to two states and obtaining information relating to FM arrangements in through a questionnaire
form from five states,
Participation in workshops on Financial Management and Procurement held for the Project at
Ahmedabad (June 22 - 23,2006), N e w Delhi (August 25 - 26, and September 20,2006) and Kolkata
(November 14 - 15,2006), and
Regular discussions with official o f the DGE&T/MoLE.
0
2. The assessment showed existence o f a well established system o f budgeting as per a defined cycle o f
preparation and approval at the State levels. Accounting at State level i s carried out as per standard state
financial procedures and focuses on book-keeping. A simple system o f expenditure reporting by ITIs to
the concerned state office exists to report on expenditure against plan and non-plan budget. Audit i s
carried out by the State’s Auditor General (AG). The timing o f audit in States varies so that while in some
years audit i s completed within a few months o f the end o f each financial year, at other times annual audit
may not take place and audit for two financial years may be taken up simultaneously. In addition to the
issue relating to audit, the other areas o f weaknesses include: (a) reported delay in receipt o f funds from
the treasury in some States, (b) variations in financial delegation at ITIs and States, and generally very
l o w delegation o f powers to the IT1Principals, (c) internal audit capacity being variable and generally in
the nature o f inspection as per traditional State Government systems, and (d) variation in the number/
quality o f staff responsible for accounts at ITIs and at the state level. Learning from the assessment has
gone into the design o f the Project FM arrangements.
11.
Country Issues
3. The following country issues are relevant for the Project:
0
Timeliness o f audit reports i s an issue in light o f the fact that Auditor General (AG) in each state will
be responsible for audit o f the project activities/ expenditure. T h i s will be mitigated partly by the
States’ follow up with the AG to ensure issuance o f the reports within the prescribed timeframe;
however delays may s t i l l occur in some instances.
0
At the state level, finds may not be available o n time. There have been instances o f delay in
provision o f funds after approval o f the State Budget. In response, firm timelines o n release o f finds
have been laid down and t h s will be followed up with strict monitoring by the NPIU.
111.
Risk Assessment and Mitigation
Risk
Risk Rating
Risk Mitigating Measures
Incorporated into Project
Design
Inherent Risk
Capacity: Different StatesNTs have
different capacities. Adherence to
u n i f o r m project procedures, timely
reporting and coordination will be a
Development and
implementation o f Financial
Management Manual.
Robust monitoring by NPIU
at Go1 level and SPIUs at
State levels
53
Risk
I
I
Control Risk
Funds Flow: There could be delavs in
flow o f funds both from the Go1 i o
the States and at the State level by the
State treasuries
Risk Rating
~
Substantial
Financial Reporting: Existing
reporting systems, both by ITIs and
States, focus o n utilization against
budget heads, to enable release o f
next tranche o f funds. Reporting i s
mostly in the form o f utilization
certificates
Auditing: Delay in submission o f
audit reports resulting in delay in
submission o f Consolidated Report
on Audit to the Bank
Delegation of Financial Powers:
Variation in financial delegation
across States. Generally very l o w
delegation levels at ITIs.
Medium
Overall risk rating
Substantial
IV.
0
0
0
V.
High
I
I
Risk Mitigating Measures
Incorporated into Project
Design
Simplification o f norms at
the MOLEand close
monitoring by the NPIU o f
the funds releases.
Disclosure/sharing o f
information o n releases with
the State through the
DGE&T website
Implementing entities w i l l be
required to provide financial/
physical information in the
form o f quarterly IUFRs.
T h i s will assist project
monitoring as well as ensure
regular disbursement
Follow up by DGE&T/MoLE
and request for scheme
specific audit certificate to
the C&AG/ State AGs
I
I
I
I
Medium
levels and detailed planning
through the mechanism o f the
Institutional Development
Strengths
Existing Government systems o f accounting and book-keeping have their own systems o f checks and
balances; they ensure reasonable controls before making payments for any goods or services.
The process o f preparation and approval o f the Institutional Development Plans (IDPs) ensures
discipline in the planning and forms a sound basis for effective monitoring.
T h e Institutional Management Committees (IMCs) in I T I s are expected to play an active role in
monitoring project activities/ allocation and thus ensuring judicious utilization o f resources.
Weaknesses and Action Plan
Significant
Weaknesses
An existing accounting system
which mainly focuses on bookkeeping, rather than financial
management
Accounts staff at ITIs and most
State offices do not have
experience o f producing project
financial reports
Action
Responsible
Person
Completion Date
Development o f
Financial Management
Manual
MOLE’S
Finance
Staff
Ongoing
implementation o f
the Manual
Training o f accounts
staff at all levels o f the
project in FM
requirements o f the
NPIU Finance
Officer/SPIU
Finance Officer
Schedule for
ongoing training
54
VI.
Implementing Entity
4. A core National Project Implementation Unit (NPIU) has been established by the DGE&T to start
guiding the States and institutions that have already joined the Project fi-om August 2006, and to start
providing support to the National Project Director and the National Steering Committee in discharging
their functions. The fully functional NPIU will be setup by October 31, 2007. State Project
Implementation Units (SPIUs) will be established in the project States to manage the Project.
5. The DGE&T will be provided the budget for the Project and will further pass on the funds to the
States implementing the Project. This will be done through the Reserve Bank o f India and funds will be
transferred to the State Treasury. At the State level, the Concerned Department for vocational training will
make a budgetary provision for the entire expenditure in the State including the State’s share o f funding.
Expenditure under the Project will either be made centrally by the Directorate concerned with vocational
training or at the I T I s . The Principals o f ITIs are designated as drawing and disbursal officers and draw
funds from the State Treasury for payments. Each office which makes payments will maintain regular
books o f account and records as per the State government procedure. At ITIs, the existing accounts staff
will carry out project related financial management tasks such as preparation o f estimates, maintenance o f
accounts, financial reporting, procurement, etc.
VII.
Budgeting
6. Basis for project activities in each state will be the Institutional Development Plan (IDP) which will
include financing requirements. T h e IDPs will be screened and reviewed by the State Steering
Committees (SSCs) and recommended to the National Steering Committee (NSC). Once approved by the
NSC, the I D P will be considered as final and form the basis for preparation o f the budget. Budgeting for
Project activities will be carried out as follows:
0
National Level: M o L E will be responsible for preparation o f the budget for i t s own expenditure as
well as expenditure to be incurred at the centrally funded institutions.
0
State Level: At the State level, the project budget will be prepared by the concerned Directorate and
submitted to the Finance Department for approval and inclusion in the overall budget for the State.
T h i s will be for the total expenditure in the State including the Go1 share.
7. As part o f the Project implementation, M o L E will monitor (and share with the Bank every March) the
budgetary provision made by i t s e l f and by each State, separately.
VIII.
Accounting
8. Accounting will be done o n a cash basis, using government systems; expenditure will be recorded and
reported at the time o f payments and not at the time o f release o f funds (or at the time o f authorization
through the Treasury system) to subordinate offices. Rules for accounting will be guided by the General
Financial Rules (GFRs) as applicable to all transactions at the Go1 and State levels. Adequate records will
be maintained at accounting locations and will include vouchers, invoices, cash books, ledgers and asset
registers. Summary o f transactions will be sent to the next higher level based on specific formats. Process
o f consolidation o f expenditure information/ reporting i s explained in the following flow diagram.
55
VTI Project, Expenditure Reporting
I Quarterly Reporting
I
Directorate for
Vocational
Training (State)
9. Financial Management Manual (FMM: A FMM has been prepared by the DGE&T in MoLE.
Though the accounting/ book-keeping will be as described above, the FMM clarifies and documents the
procedures relating to budgeting, funds flow, reporting, auditing, etc. The FMM will be a useful
document for the purposes o f monitoring as well as for capacity building o f staff.
IX.
Staffing and Training
10. The M o L E has adequate accounting s t a f f as any other Ministry o f the GoI. The Finance Function i s
headed by the Financial Advisor who i s assisted in his/ her functions by Director Finance and a Controller
Accounts. I t i s envisaged that under the project a National Project Implementing Unit (NPIU) will be
established and will include Financial Management staff under the supervision o f the officers mentioned
above. Similarly a State Project Implementing Unit (SPIU) will be setup at the state level.
11. T o ensure effective FM on the program, concerned staff (all staff at NPIU/ SPIUs and some staff
from the ITIs) will be provided training as per a project specific FM training module. Significant amount
o f the training effort will be concentrated in the early stages o f the project (‘frontloaded’ within the first
year o f the project) to ensure correct accounting and timely reporting.
X.
Internal Control and Internal Auditing
12. Internal controls include procedures laid down for approvals, appropriate documentation, controls
exercised by the State treasury at the time o f release o f payments, etc. The internal control procedures
have been described in the FMM. These procedures include physical verification o f assets.
13. Internal Audit (IA) in most o f the States i s carried out by a small in-house team which checks
compliance with laid down rules, adequacy o f documentation, due approvals for any expenditure, etc.
Alternatively, ‘inspections’ are carried out in many States which cover a wider range o f issues.
14. Impact and adequacy o f both internal controls and internal audit will be assessed during the Project
supervision. The following enhancements in the arrangements have been agreed with the DGE&T: (a)
Management Reviews to be carried out as per specific TORS(to be agreed between the DGE&T and the
Bank). Focus o f reviews will be on strengthening implementation. This may cover evaluation o f
effectiveness o f delegation, funds flow constraints, documentation/ reporting arrangements, functioning
56
o f IMCs, information sharing arrangements, quality and numbers o f staff, etc; (b) Piloting LA by existing
staff as per agreed TORS;and (c) consolidation o f findings o f the I A work at the State level for analysis
and implementation o f remedial measures.
XI.
Funds Flow Arrangements
15. The Project cost i s being borne by the Go1 and the States in the ratio o f 75:25. For the North-Eastern
states and Sikkim, the financing ratio would be 90: 10.The share o f Go1 funds for various Project
components will be released by MOLEto the States through the Go1 channels and funds will be received
in the State Treasury. At the State level, the Directorate responsible for vocational training will prepare a
budget for the entire expenditure including its share o f 25 percent. Budgets will then be allocated by the
State Finance Department to the concerned Directorate, which will further allocate the same to the ITIS/
i t s e l f for incurring expenditure. As Drawing and Disbursal Officers (DDOs), the IT1 Principals/ Directors
for Vocational Training will authorize bills which are then presented t o the State Treasury for release o f
payments against the allocated budgets. This i s explained in the flow chart below.
VTI Project, Funds Flow Arrangements
Government of India
(75%)
I
World Bank
MOLE'SBudget Head
1
State Share
(25%)
State Treasury
1
v
Central ly Funded
lnstitutionss
Directorate for
Vocationall Training
(State)
I
-b
I
ITls
4- - _ _ _ _ - - - _ _ _ _ _ - - - - - - - - V
Installment No./ Approximate
Date
First installment in April
Second installment in October
YOof Go1 share
80%
Document to be submitted by
state
Duly approved IDPs/ State
20%
Budgetry Provision
Furnishingof reasonable evidence
Installment as
57
XII.
Disbursement Arrangements
17. Disbursements from the World Bank will be made against quarterly Interim Unaudited Financial
Reports (IUFRs) to be submitted within 45 days o f the close o f each quarter. T h e IUFRs will provide
information o n project activities according to Project components and sub-components, and project
States. Expenditure as reported in the IUFRs will be subject to confirmation/ certification as per the
Annual Audit Reports as submitted for each State/ GoI. The NPIU will be responsible for consolidation
and submission o f IUFRs. Funds will be disbursed in a Special Account with the Reserve Bank o f India
which will be operated by the Department o f Economic Affairs (DEA) o f GoI. The authorized allocation
o f Special Account will be USD 40 million.
18. Other disbursement features:
0
Disbursement would be subject to receipt o f Consolidated Report on Audit which i s due by
September 30* o f each year. As per the Bank Policies, if this report i s not received by endJanuary o f
the following year, disbursements will have to be suspended till receipt o f the report. Go1 would
however continue to submit the quarterly IUFRs as per schedule.
If the audit report indicates a higher level o f eligible expenditure as compared to the IUFRs for the
same period, the excess will be added to the next report based disbursement. On the other hand, if the
audit reports a lower level o f eligible expenditure as compared to the IUFRs for the same period, an
adjustment will be made from the next disbursement by way o f a reduction.
19. After the mid-term o f the Project, further disbursement will be subject to achievement o f the
instructor Training Wings shall have been established in at least 4 Project
following benchmarks: (i)
States; (ii)refresher training courses for instructors shall have commenced in at least 10 Centers o f
training facilities for CoE instructors shall have been established and training courses
Excellence; (iii)
commenced in all concerned centrally funded institutions; (iv) at least 2 policy studies related to policy
reforms shall have been launched; (v) at least 2 innovation grants shall have been made; (vi) Management
Information System shall have been operationalized; and (vii) database o f instructors in all ITIs in project
States and their training needs analysis completed by AHI.
20. Retroactive Financing: The Bank will fund cost o f upgradation o f 100 ITIs on retroactive basis for
eligble expenditures. The total amount o f retroactive financing o f expenditures by the Bank will not
exceed 20 per cent o f the credit for a maximum o f 12 months prior to expected date o f signing o f
Financing Agreement. Any expenditure in excess o f these (time lines/ percentage) will have t o be borne
by the GoYStates.
XIII.
Financial Reporting
21. Project expenditures will be reported by the project ITIs to SPIUs and by the SPIUs to the NPIU. The
NFW will submit consolidated IUFRs on a quarterly basis t o the Bank within 45 days o f the end o f each
quarter. T h e IUFRs will include State-wise and activity-wise expenditure for the previous quarter and the
year to date. As per standard procedures for CSS, the States will submit utilization certificates (UCs) to
MOLEfor funds received by the State in each financial year.
XIV.
Auditing
22. Annual accounts o f the DGE&T for i t s part o f the Project (NPIU, centrally funded institutions, etc.)
will be audited by the Comptroller and Auditor General o f India (C&AG). The Accountant General (AG)
o f each State will carry out annual audit o f accounts o f the State for i t s part o f the Project (SPIUs, ITIs,
58
etc.). These audits will be as per the Terms o f Reference (TOR)which has been agreed with the MOLE,
and have been sent to the C & A G for their approval and issue o f necessary communication t o the AGs in
each project State. The DGE&T will provide a consolidated Report o n Audit t o the Bank for the Project,
based on audit reports o f the States and its own audit report. The consolidated Report o n Audit for each
financial year will be submitted to the Bank within six months o f close o f the financial year i.e.
September 30. State specific audit reports will also be provided to the Bank, as requested. Further, the
NPIU will review the audit findings to ensure necessary corrective actions.
23. The following audit reports will be monitored in ARCS (Audit Report Compliance System) o f the
Bank:
Audit Report
Consolidated Report on
Audit
Special Account
XV.
Implementing Agency
DGE&T/ States
Due Date
September 30
DENGoI
September 30
Supervision Plan
24. Areas o f focus during supervision will include funds flow, internal/ external audit findings and quality
o f reporting. The supervision intensity will be bi-annual including visits to States; this may however be
varied in accordance with implementation experience. Supervision efforts may include comparison o f the
Project with other Centrally Sponsored Schemes and projects/ programs in comparable sectors.
59
Annex 8: Procurement Arrangements
INDIA: Vocational Training Improvement Project
I.
General
1. The project envisages financing upgradation o f 400 Industrial Training Institutes (ITIs); establishing
instructor training wings in ITIs, strengthening o f several centrally funded institutions, capacity building
and policy development. O f the 400 ITIs, 100 will be covered under retroactive financing and the balance
will be covered during the Project period. Procurement under the Project will include (i)
refurbishment,
extension, repair and maintenance o f existing buildings; (ii)equipment; (iii)teaching and learning
resources and materials; (iv) instructor training; (v) curriculum development, (vi) information campaigns
and dissemination; (vii) consultancy and technical assistance; and (viii) operating and maintenance costs.
The Project will be implemented by MOLE,States and ITIs.
2. Procurement for the proposed project would be carried out in accordance with the W o r l d Bank's
"Guidelines: Procurement under IBRD Loans and IDA Credits" dated M a y 2004; and "Guidelines:
Selection and Employment o f Consultants by W o r l d Bank Borrowers'' dated M a y 2004, and the
provisions stipulated in the Legal Agreement. The various items under different expenditure categories
are described in general below. Items (works, goods and services) t o be financed by the credit, the
different procurement methods or consultant selection methods, estimated costs, prior review
requirements, and time frame have been agreed between the Recipient and the Bank.
3. A Disclosure Management Framework i s attached as Appendix 1 t o this annex.
Procurement
NCB
Shopping
Retroactive
Financing
0.293
0.745
Year-I
2007-08
20.722
24.887
Year-I1
2008-09
18.284
14.300
Year-I11
2009-10
3.093
2.641
Year-IV
2010-1 1
1.625
1.185
5. Total cost o f the civil works i s expected to be approximately U S $ 88 million.
60
Year-V
201 1-12
---
6. Procurement o f Goods: Goods to be procured under this Project include: machines, equipment,
furniture, learning resources, software, hand tools, measuring equipment, motor vehicles and other related
equipment. Type o f equipment will depend on the industrial sector selected by the IT1 for upgradation as
Centre o f Excellence (COE) or as may be required by ITIs for upgradation o f selected trades. The
procurement will be done using the Bank’s Standard Bidding Document (SBD) for all I C B and GoI’s
Task Force Bidding Documents, as modified from time to time, already agreed with the Bank for National
Competitive Bidding will be used. Procurement under ICB, if required, will be carried out by M o L E by
hiring a procurement agent. Procurement under NCB, Shopping and Direct Contracting will be done by
the StatesLTIs as may be decided by the StatesKJTs. Rate contracts o f Directorate General o f Supplies
and Disposals (DGS&D) are acceptable under Shopping. State Government rate contracts could be
considered as one o f the quotations under Shopping.
7. Estimated cost o f packages for each year under various methods o f procurement i s given below.
*If required, I C B will be carried out by M o L E who will make necessary funds available as per
requirement o f the State Govt.
8. Total cost o f the Goods i s expected to be approximately US$ 126 million.
9. Procurement o f Services: Consultants, individual or firms, may be hired under the Project based o n
requirements o f the NPIU, SPIUs, centrally funded institutions and ITIs. Training o f Trainers will be
arranged through twelve (12) centrally funded institutions - Six (6) Advanced Training Institutes (ATIs)
located at Howrah, Chennai, Hyderabad, Kanpur, Ludhiana and Mumbai, Central Training Institute at
Chennai, ATI-Electronics and Process Instrumentation at Hyderabad and Dehradun, Foremen Training
Institute at Bangalore, Apex Hi-Tech Institute at Bangalore and the National Vocational Training Institute
for Women at Noida. Though no fee will be paid to these institutions, other expenditure incurred by them
in arranging training will be paid to them. In the case o f procurement o f goods under ICB, M o L E may
utilize the services o f a procurement agent selected following Bank’s consultancy procedures. Short lists
o f consultants for services estimated t o cost less than $500,000 equivalent per contract may comprise
entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant
Guidelines.
10. Total cost o f the Services i s expected to be approximately US$9.0 million.
11. Operating Costs: This will include salaries o f full time project staff in NPIU/SPIU, salaries o f staff
against positions created under the project in centrally funded institutions and ITIs, payment t o
contractual staff, consumables including laboratory/workshop supplies, office rental, cost o f
advertisement, office expenditure, hiring o f vehicles, maintenance o f buildings/equipment/vehicles, travel
expenses etc.
61
12. Procurement thresholds: The thresholds for adopting different types o f procurement for works,
goods and consultant selection methods, which have been discussed and agreed with MOLE,are given in
the table below:
Works
ICB
US$ 1.OO million
equivalent*
NCB
US$ 100,000 to
US$ 1.OO million
equivalent
Goods
> US$l .OO million
> US$ 100,000 up to
US$l .OO million
equivalent
equivalent
Consultancy
Services
DC
Shopping
<us$loo,ooo
equivalent
< US$ 100,000
< US$20,000
equivalent#
< US$50,000
[email protected]
equivalent**
<US$500
equivalent#
Quality and Cost Based Selection (for selection o f Firms):
Estimated to cost > US$ 500,000 equivalent: international shortlist.
Estimated to cost U S $ 500,000 equivalent or less: short l i s t may comprise national
consultants only.
Quality Based Selection (for selection o f Firms): Estimated to cost < US$200,000
Single SourceLeast Cost Selection:
With firms for contracts estimated to cost < US$ 100,000 equivalent each; and
Individual Consultants: <US$50,000 equivalent
National Competitive Bidding (NCB) Provisions
13. All N C B contracts shall be awarded in accordance with the provisions o f Paragraphs 3.3 and 3.4 o f
the Guidelines for Procurement under IBRD Loans and IDA Credits published by the B a n k in M a y 2004
[the Guideline]. In this regard, a l l NCB contracts to be financed from the proceeds o f the credit shall
follow the following procedures:
Only the model bidding documents for NCB agreed between the Go1 and the Association (and as
amended from time to time) shall be used for bidding;
0
Invitation to bid shall be advertised in at least one widely circulated national daily newspaper, at least
30 days prior to the deadline for the submission o f the bids;
0
N o special preference will be accorded t o any bidder either for price or for other terms and condition
when competing with foreign bidders, state-owned enterprises, small-scale enterprises or enterprises
from any grven State;
Except with the prior concurrence o f the Bank, there shall be no negotiation o f prices with the
bidders, even with the lowest evaluated bidder;
Extension o f bid validity shall not be allowed without the prior concurrence o f the Bank: (i)
for the
first request for extension i f it i s longer than four weeks; and (ii)
for all subsequent requests for
extension irrespective o f the period (such concurrence with be considered by the Bank only in cases
o f Force Majeure and circumstances beyond the control o f the MoLEhmplementing agencies).
62
0
Re-bidding shall not be carried out without the prior concurrence o f the Bank. The system o f
rejecting bids outside a pre-determined margin or “bracket” o f prices shall not be used in the project;
Rate contracts entered into by Directorate General o f Supplies and Disposals (DGS&D) will not be
acceptable as a substitute for NCB procedures. Such contracts will be acceptable, however, for any
procurement under Shopping procedures; and
T w o or three envelop system will not be used.
Advertising
14. Invitation for Bids (IFB) for Works and Goods for a l l ICB contracts and advertisement for calling o f
Letters o f Expression o f Interest (EOI) for short listing o f consultants for services costing more than U S $
200,000 equivalent will be published widely including in UNDB and dgMarket. In addition, a l l
competitively procured contracts will be advertised in at least one widely circulated national daily
newspaper as w e l l as on the DGE&T website.
11. Assessment o f the agency’s capacity to implement procurement
15. All States, U n i o n Territories and I T I s as selected will be participating in the Project. I T I s will be
selected as per the criteria agreed by the DGE&T with the W o r l d Bank. Procurement activities will be
carried out by the respective concerned State Directorates and ITIs except for ICB packages. A
procurement manual, developed by the project authorities, has been agreed to with the Bank o n April 11,
2007. All procurement under the project will be undertaken as per this manual.
16. A review o f existing procurement policies, procedures and capacity was carried out through a
consultant in respect o f DGE&T at the central level and o n a sample basis for four states (Bihar, Gujarat,
Karnataka, and Uttar Pradesh) and eight I T I s (ITIs at Nawada & Digaghat in Bihar, Kubernagar &
Gandhinagar in Gujarat, Peenia & Mysore in Karnataka, and Lucknow & Noida in Uttar Pradesh)
selected with the agreement o f DGE&T. The assessment reviewed the organizational structure for
implementing the project and the interaction between the DGE&T officials responsible for procurement
and the relevant central unit for administration and finance o f states’ D V T s .
17. The overall project risk for procurement i s high.
18. The key issues and r i s k s concerning procurement for implementation o f the Project have been
identified and corrective measures to mitigate these have been agreed to with the DGE&T.
Post Award Review
19. All contracts below prior review threshold procured under the project will be subject to periodic post
review. These reviews are meant t o ensure that the laid down procurement procedures are being followed.
20. The ex-post review by the Bank will be conducted either by Bank staff or by independent firms hired
by the Bank in accordance with Paragraph 5 o f Appendix 1 o f the Bank’s Procurement Guidelines.
Misprocurement
21. The Bank does not finance expenditures for goods, works and services which have not been procured
in accordance with the agreed provisions in the Financing Agreement and as further elaborated in the
Procurement Plan. In such cases, the Bank will declare misprocurement, and i t i s the policy o f the Bank
to cancel that portion o f the credit allocated to the goods, works and services that have been misprocured.
The Bank may, in addition, exercise other remedies provided for under the Financing Agreement. Even
63
after a contract i s awarded after obtaining the “no-objection” from the Bank, the Bank may s t i l l declare
misprocurement if it concludes that the “no-objection” was issued on the basis o f incomplete, inaccurate
or misleading information furnished by the Recipient or the terms and conditions o f the contract had been
modified without Bank’s approval.
111. Frequency of Procurement Supervision
22. In addition to regular monitoring and prior reviews, the project will require intensive supervision in
the initial stages o f the project. Accordingly, the designated procurement specialist (DPS) will participate
in the six monthly supervision missions. DPS may also visit States/UTs/ITIs to carry out post review o f
contracts.
IV. Procurement Plan
23. Since it i s not feasible to forecast the requirement o f the I T I s as it will depend upon their agreed
Institutional Development Plans (IDPs), it i s difficult to prepare the procurement plan for the entire
project period at this stage. However, procurement plan for 100 ITIs being retroactively financed has
been prepared and shared with the Bank. Similarly, during implementation o f the Project, once the IDPs
have been approved, procurement plan will be prepared and shared with the Bank.
24. Prior Review o f contracts for goods and works by the World Bank will be carried out for (i)
each
contract for civil works and goods/equipment estimated to cost more than U S $ 500,000 equivalent; and
(ii)
f i r s t N C B document for c i v i l workdgoods, irrespective o f value, from any one o f the States.
each
25. Prior Review o f contracts for consultancy services by the World Bank will be carried out for (i)
contract for employment o f consulting firms estimated to cost the equivalent o f U S $ 100,000 or more;
(ii)
each contract for the employment o f individual consultants estimated to cost equivalent o f U S $
50,000 or more. However, DGE&T will approve the terms o f reference for studies and surveys for
US$ 4,450 for individual consultants; and (ii)
US$ 11,100 for
contracts estimated to cost more than (i)
filTIlS.
26. Retroactive financing would be applicable where payments, against contracts for goods, works, and
consulting services awarded following Bank’s procurement procedures and included in the scope o f the
Project, are made by the Recipient not more than 12 months before the expected date o f Financing
Agreement signing. The date after which payments may be made i s recorded in the Financing
Agreement.
64
Appendix 1 to Annex 8: Disclosure ManagementFramework
I.
Introduction, Scope and Purpose
1. The Ministry o f Labour and Employment (MoLE) i s fully committed t o ensuring transparency and
accountability under the Project. The MoLE has developed this Disclosure Management Framework, in
consultation with the Association, t o enhance transparency and accountability in the implementation o f
the Project. The key issues and related agreed actions are set out in the table below.
Implementation Status
Issue
Agreed Actions
I.Disclosing
information and
increasing
oversight by the
civil society
(i)
Making the following information
publicly available o n the website o f
Directorate General o f Employment and
Training (DGE&T) and o f the
implementation units o f the States
participating in the Project (SPIUs):
(a) information relating to physical and
financial progress under each contract
awarded o n the basis o f I C B M C B
procedures. Such information to be
made available within 30 days from the
end o f each calendar quarter;
(b) quarterly interimun-audited
financial reports within 45 days from the
end o f each calendar quarter;
(c) all general and specific procurement
notices, notices inviting tenders,
expressions o f interest, requests for
proposals, ICB/NCB documents and
addenddcorrigenda to bids. All such
information to be promptly disclosed;
(d) all information o n bids received,
reasons for rejections, and details o f
contracts awarded for ICB. Such
information shall also be shared with
the Association;
(e) all information o n bids received,
and details o f contracts awarded for
NCB; and
(0 Annual progress reports (Project and
financial information) and mid-tern
review report. Annual progress report to
be disclosed by M a y 15 o f each fiscal
year and mid-termreview report to be
disclosed promptly.
65
Implementation to start
immediately after
Project effectiveness
PersonlAgency
Responsible for
Implementation
M o L E and Participating
States
Issue
Agreed Actions
Implementation Status
PersodAgency
Responsible for
Implementation
~~
11. Handling
procurement
complaints
(a) Handling complaints relating to
procurement, fraud and corruption and
quality o f construction in accordance
with Go1 and participating StatesLJTs
adrmnistrative procedures;
T o be implemented from
project effectiveness.
(b) A procurement complaints
monitoring database shall be maintained
T o be implemented from
project effectiveness
(c) disclosing the system pursuant to (a)
and (b) above respectively o n the
website o f DGE&T;
T o be implemented from
project effectiveness
MoLE/Participating
States
MoLEParticipating
States
Reports to be submitted
within 30 days from the
end o f the quarter.
(d) submitting quarterly reports to the
Association on (a) and (b) above.
MOLE
66
Annex 9: Economic and FinancialAnalysis
INDIA: Vocational Training Improvement Project
I.Background
1. India’s objectives o f competing in global markets and achieving sustained high rates o f economic
growth require the availability o f well-trained s l l l e d labor. A critical constraint faced by the labor market
i s shortage o f such labor. This shortage has largely been due to the inability o f the public vocational
training system, one o f the key providers o f skilled labor, to produce trained graduates with the s l u l l s that
match employers’ needs. The objective o f the Vocational Training Reforms Project i s to upgrade and
reform the vocational training system to re-orient and make i t more responsive to the skills demanded by
the labor market, and to improve the quality o f trained graduates produced by it. T h i s annex examines: (a)
the labor market context and supply o f skills; (b) the rationale for public investment in the Project; and (c)
the financial sustainability and economic benefits o f the Project in terms o f benefit-cost ratios and rates o f
returns t o investments over alternative scenarios.
11. The Labor Market Context and Skills Supply from CTS Institutions
2. India’s economy has grown rapidly in the last decade causing a rising demand for a more educated
and skilled workforce. In response, the Government o f India has expanded investments in education and
sought t o improve delivery o f post-school vocational training for the youth not continuing into further
education. In education, the relative wages o f workers with secondary and higher levels o f education
have grown even as the supply o f these workers has increased, providing evidence that the demand for
educated workers has outstripped supply. The evidence i s mixed for workers with post-school vocational
training, whose relative wages and numbers have fallen since the early 1990s.
3. Definitive inferences cannot be drawn about the supply-demand balance for vocationallytrained workers, but this evidence suggests that they may not have the right skills demanded by the
labor market. Even with rising demand for skilled labor, nearly 60 percent o f all graduates o f the
vocational training system remain unemployed a year after completing training. Moreover, among those
who did find employment, nearly two-thirds worked in trades other than those they were trained for. An
ILO study (2003) showed that more than eighty percent o f employers in Orissa and Andhra Pradesh, and
more than fifty percent o f employers in Maharashtra occasionally or frequently faced problems in finding
employees with the right skills.
4. The three most important reasons for poor labor market outcomes for graduates o f the training system
are: (a) the l o w quality o f training which results in the supply o f relatively l o w quality skills; (b) the
mismatch between sktlls acquired and those in demand in the labor market; and (c) the mismatch between
skills taught and the graduates’ own career and labor market aspirations. The l o w quality o f skills
supplied by vocational training institutions i s highlighted by the findings o f several recent studies. A
survey by FICCI (2001) assessing the quality and relevance o f vocational and technical training from
industry’s perspective found that about 60 percent o f employers felt that training institutions were not
geared to meeting the needs o f industry, and almost 87 percent felt that training should include exposure
to industry practices. A DGE&T (2003) study o f graduates o f apprenticeship training programs in six
States came to the same conclusion. In both studies, respondents stressed the importance o f partnerships
and collaboration between the public and private sectors for achieving a better match between the supply
o f and demand for slulls.
67
5 . A recent Report on Craftsmen Training and Employment (DGE&T, 2005) underscores the findings o f
the earlier DGE&T (2003) and FICCI (2001) studies. The report sought to evaluate ITIs in the states o f
Punjab, Haryana and Rajasthan. Based on responses from IT1principals, faculty members and students,
the Report concluded that course offerings and training in ITIs were rigid and did not respond to the
changing demands o f business and industry. The percentage o f students in various trades who were not
employed at the time o f the survey (about a year after training) ranged from a little over 10 percent to as
high as 80 percent. The Report identified collaboration between ITIs and industryhusiness as a critical
factor in improving labor market outcomes o f graduates o f the training system. Greater public and private
sector collaboration in training would enhance flexibility in responding to changing labor market s k i l l
needs, aid in continuous upgrading o f courses, curriculum development and faculty support, and help
mobilize resources, among other benefits.
111. The Rationale for Public Investment
6. T h e vocational training system in India needs to be improved and reformed t o remove the constraints
on the supply o f skilled labor in quantities and fields o f training demanded by the labor market. Given the
public good nature o f the reforms in training, they will be under- or not supplied by the private sector. As
such, public investment in the vocational training system in India i s needed, and needed for the following
reasons:
Policy Reforms: Institutional and systemic reforms to improve market orientation and flexibility o f
the vocational training system so that it becomes more responsive to the changing s k i l l needs o f the
labor market and the economy.
Contribution to Growth: Greater availability o f skilled labor increases the productivity o f enterprises
and contributes t o the speed with which institutional and technological innovations can be adapted
and adopted. Increased educational attainment o f one year in a firm’s workforce i s associated with a
six percent increase in firm’s productivity (World Bank, 2006).
Information Asymmetry: The paucity o f relevant information o n skills needed by the economy and on
the availability o f different types o f training lead to inefficiencies in the operation o f the market for
skills. The provision o f such information i s a public good and the government has an appropriate role
to play in collecting, analyzing and widely disseminating this information to the labor market.
Market Failure: Market failure in the market for vocational training i s reflected in supply side
constraints which prevent the private sector from expanding the supply o f good quality vocational
training.
Skill mismatches between skills demanded and skills supplied and the l o w quality o f s h l l s supplied
are due in large part to the many constraints faced by the training system in India, especially in the public
vocational training system. These include outdated equipment and course curricula, budget constraints,
lack o f accountability and responsiveness to the needs o f the labor market, limited involvement o f the
private sector in managmg training design and delivery, poor coordination among those managing the
sector, and the limited flexibility provided to training institutions to experiment and innovate.
8. The Project addresses these constraints through: (a) competitive grants provided to selected ITIs for
up-gradation or for establishing Centers o f Excellence (CoE); (b) provision o f funds to support
innovations in training programs and training delivery; and (c) policy reforms, capacity development and
incentive funds for well-performing states to further develop their vocational training systems. A more
detailed description o f the project components are found in Annex 4.
68
IV. Overview of ITIs and IT1 Graduates from Baseline Surveys
9. As part o f project preparation for the Vocational Training Improvement Project (VTIP), two baseline
surveys were undertaken in 2006: (i)an institutional survey o f all government managed and financed
industrial training institutes (ITIs) in India, and ii)a tracer study o f pass-out (graduates) from a sample o f
I T I s . Both surveys are intended to provide a pre-project baseline for a substantial part o f the public
vocational training system in India, and with modifications, the basis for setting up a Management
Information System (MIS) for monitoring and evaluation o f the sector under the Project.
Baseline Survey of ITIs
10. The 2006 Baseline Survey o f I T I s was fielded in collaboration with the Ministry o f Labour and
Employment (MOLE)to all 1896 public ITIs across 23 Indian states. O f these, 1,296 I T I s returned the
questionnaire survey for coverage o f approximately 70 percent o f the IT1 population. The survey
collected data on the following aspects o f I T I s :
0
0
0
0
0
Management: including questions on staff profiles, vacancies, and existence o f a Centre o f Excellence
(COE) andor Institutional Management Committee (IMC).
Finance: including disaggregated details on the planned and non-planned budget and expenses o f the
ITI, and retained revenues.
Students: including total enrolments, with gender and social group breakdowns.
Teachers: including composition o f teaching staff, their education, training, work experience, status
in the ITI, and trades taught.
Trades: including a profile o f trades taught in the ITI, type o f trade, duration and the numbers
enrolled, number o f students that took and passed the trade test, separately for the years 2003104,
2004105 and 2005106.
11. Selected summary tables are reported below o n the characteristics o f the sample o f I T I s that
responded to the survey, focusing on staffing and measures o f IT1 internal efficiency. (A full report i s
forthcoming that will include more detailed tables and analysis, with breakdowns by States and Union
Territories).
12. Table 9.1 shows the composition o f IT1 staff summed across all I T I s that responded to the baseline
survey. Ninety (90) percent o f staff are vocational instructors, 3.5 percent are contract teachers, 6 percent
are management personnel (including principals and vice principals), and less than one percent are nonteaching staff. Women make up less than 12 percent o f IT1 staff, and scheduled caste or schedule tribe
(SCIST) staff constitute around 21 percent o f the total sample o f IT1staff.
69
13. According t o the baseline survey, an IT1 o n the average has 24 instructor positions and enrolls 119
students. On average, the teachng faculty consists o f 14 vocational instructors, one contract teacher and
one guest lecturer from the private sector; unfilled staff vacancies average 7 instructors. The average age
o f a typical IT1 instructor i s 42.5 years, with female instructors being on average slightly younger than
males, 39.6 versus 42.9 years respectively. The average instructor’s tenure with the I T I s i s 5.9 years with
almost n o difference between male and female instructors. M o r e than h a l f o f the personnel, 56 percent,
attended some form o f staff training in the past 3 years.
14. Table 9.2 presents estimates o f the internal efficiency o f I T I s by course duration and demographic
characteristics o f students. The indicators of internal efficiency are the proportions o f enrolled students
that completed the training course and took the trade test, and those that successfully passed and obtained
trade certification. These estimates are for the students enrolled in the 2003/04 year since subsequent
cohorts may not have completed training and trade tests by the time o f the survey. On the average, 78
percent o f the two-year program students took the trade test, but only 61 percent passed it. While females
in one-year programs are more successful in both taking and passing the trade test than their male
counterparts, the difference between them i s negligible when i t comes to students in the two-year
program. On the average, SC students are usually more successful than ST students in completing training
and passing trade tests.
Males
Females
Scheduled Castes
Scheduled Tribes
All Graduates
Proportion o f enrolled students
talung trade test (%)
2-year
1 year program or
program or
less
more
87
79
90
85
91
79
88
84
90
78
Proportion o f enrolled students
passing trade test (%)
2-year
1 year program
program or
or less
more
63
61
78
67
75
66
63
65
70
61
Tracer Study of I T I Pass-outs
15. The IT1baseline survey was complemented by a tracer study o f IT1 pass-outs one or t w o years after
they completed their training. The objective o f this tracer study was to assess the labor market outcomes
of graduates - in terms o f j o b search, employment status, and earnings i f employed - and t o elicit their
feed-back o n the quality o f training and market relevance o f trade s k i l l s acquired in ITIs. The field-work
for the tracer study was done by a survey firm between the months o f August and December 2006.
16. Out o f a population o f 1896 public ITIs, a sample o f 400 representing nearly one-fifth o f the total was
selected for the administration o f the tracer study o f IT1pass-outs. The sample was designed to reflect the
actual distribution o f the population o f I T I s across states. I t included the first 200 I T I s selected for
upgrading in 2004/05 and 2005/06 as Centers of Excellence (COE), and another 200 I T I s randomly
selected from each State by urban and rural strata according t o the actual urbadrural composition o f ITIs
in the State. F r o m each ITI, 20 graduates were sampled from administrative records, 10 being pass-outs
from the 2004 graduate cohort, another 10 from the 2005 cohort, for a total sample o f 8,000 pass-outs.
17. The tracer study collected several types o f information: (i)
personal attributes, including information
enrolment, including the trade followed, and time taken to complete
o n socio-economic background; (ii)
employment history, from the time he/she completed training t o the present (either one or
training; (iii)
two years hence), including sector o f employment and earnings; (iv) perceptions, o f the quality and
70
usefulness o f the trade(s) studied, and aspects o f training in ITIs that require enhancement and/or
improvement. At the end o f the survey, usable data were collected from 7,144 pass-outs in 374 ITIs.
Proportion (“A) o f graduating cohort finding
f i r s t job within:
Average
months
to f r s t
job
Year Of
graduation
Proportion
unemployed at
time o f survey
6 months
12 months
18 months
2004
2005
62
72
29
24
39
30
40
31
5.0
4.1
2004
2005
78
84
19
14
19
14
3.5
2.8
2004
2005
66
76
35
25
36
26
5.1
3.9
2004
2005
71
83
29
20
30
21
4.8
4.6
2004
2005
65
73
25
23
33
28
34
28
4.9
3.9
2004
2005
63
74
26
21
35
26
35
26
4.6
3.9
2004
2005
65
74
25
21
34
26
34
27
4.8
4.0
16
13
Scheduled Caste
26
21
Scheduled Tribe
22
15
18. Table 9.3 reports several employment outcomes o f tracer study respondents, focusing o n the 2004
graduate cohort. It estimates that 65 percent o f 2004 graduates were unemployed in 2006, where
“unemployed” i s defined as not working and looking for work. Sixty-two (62) percent o f males and 78
percent o f females that graduated from I T I s in 2004 were still unemployed in 2006. O f the 2004
graduating cohort, only 34 percent found work within one year - it took 4.8 months for the average 2004
graduate to find the first job. M a l e pass-outs did significantly better than females, with 39 percent finding
a j o b within 12 months as compared to only 19 percent o f females. Finally, SC/ST graduates appear t o
experience higher unemployment rates as compared to OBC or general social groups. Moreover, only 29
percent o f ST pass-outs find their first j o b within a year after completing training as compared to 33-35
percent among other groups.
19. Table 9.4 reports the monthly wages o f employed graduates f r o m the 2004/5 cohort, normalized o n
22 working days a month. The monthly earnings o f employed 2004 graduates averaged Indian Rupees
(INR) 2,392, but there are considerable earnings differences across groups. For example, those in the
public sector earned INR 3,819 which i s a 64 percent premium over those employed in the private sector,
95 percent over those in self-employment, and 2.3 times those working in a family business. Males
earned significantly more than females (except for those in self-employment), most notably when
employed in the public sector. Although SC, ST and OBC groups generally earned less than those in the
general category, this i s heavily influenced by the wages paid to the latter group in the public sector.
Given these high wages, the preferred employment destination for males in the general category would
71
clearly be the public sector, with self-employment and working in family business being relatively
unattractive for this group o f males.
Year o f
Graduation
Public
sector
Private
sector
2004
2005
4,010
2,467
2,359
2,268
2004
2005
2,014
2.347
2,053
2.043
Self-employed
1,924
2,130
Females
2,096
1.250
Helping
parents in
business
Total
1,648
1,381
2,433
2,248
1,540
1.173
2,045
1.897
20. Despite difficulty in finding employment, pass-outs tended t o provide relatively positive feedback o n
training provided by ITIs. On the suitability and employment potential o f the trade acquired in the ITIs,
89 percent o f pass-outs responded that the trade was reasonably or very useful; 9 1 percent o f graduates
also rated the quality o f training received from ITIs as good or excellent. O f those who found
employment, 57 percent reported that they worked in the trade in which they were trained; 9 percent
were employed in a trade different f r o m the one in which they were trained, but used the s h l l s they
acquired in IT1training; 7 percent worked in a different trade where IT1training was only o f limited use.
The remaining 27 percent reported that IT1training did not help at a l l in the work they were doing.
21. However, IT1 pass-outs had more revealing suggestions o n what aspects o f IT1 training could b e
improved. Table 9.5 tabulates IT1 pass-outs’ rankings by importance o f the areas o f IT1 training that
needed improvement. H a l f o f the pass-outs ranked “information o n employment opportunities”, “meeting
with employers” and “training experience in industry” as needing a l o t o f improvement. These
suggestions are consistent with widely-held (by industry) views that many ITIs are not market oriented
and lack strong links t o industry, and they imply that ITIs should place greater emphasis o n j o b
counseling, facilitating j o b placements with employers, and arranging training internships in industry.
Other suggestions pertaining to improvements in curricula, equipment, soft skills, use o f drawings and
pedagogy are ranked as being less important, suggesting that most pass-outs are relatively satisfied with
the training provided, and 44-53 percent o f pass-outs stated that these areas did not need any
improvements.
72
V. Economic Analysis o f the VET Project
22. The economic feasibility o f the VET project i s examined through cost-benefit analysis and rate o f
retum calculations based on several assumptions and simulated over a variety o f scenarios. The benefits
that are expected from the project, as reflected in the key performance indicators (KPI), are: (a)
improvements in the internal efficiency o f upgraded ITIs, in terms o f the proportion o f enrolled students
that successfully get trade certification; and (b) enhanced labor market outcomes o f IT1 pass-outs, as
measured by the reduction in the time taken after training to find employment, and (c) by higher life-time
earnings, as compared to the baseline prior to project implementation.
23. The following analysis derives monetized values o f these three KPIs for all student cohorts enrolled
in upgraded ITIs and compares them to the per student cost o f upgrading 400 ITIs. About 300 ITIs
adopting the Centers o f Excellence (COE) model will enroll 100 students each; the remaining 100 ITIs
will upgrade 6 existing trades, each with 16-20 students, or about 100 students each. Assuming that each
upgraded IT1enrolls 100 students a year for five years, the total throughput from the 400 upgraded I T I s i s
200,000 students. The corresponding cost o f generating benefits in the form o f higher lifetime wages for
IT1 pass-outs i s the cost o f upgradingstrengthening 400 ITIs over 5 years, totaling about INR 13,800
million to be financed through Component-1 o f the Project. The per student cost o f this IT1 upgrading i s
thus INR 69 thousand.
24. The cost-benefit analysis and rate o f return calculations are based upon the following assumptions,
data sources, and scenarios.
Zero rate o f inflation and n o secular trend productivity growth over the lifetime o f IT1 pass-outs, so
that wage-experience profiles estimated at one point in time can be used to simulate lifetime wage
profiles o f IT1pass-outs and a comparison group with similar educational qualifications but without
IT1trade certification.
IT1pass-outs and the comparison group earn lifetime wages over 40 years o f work experience in the
labor market. The difference between the lifetime wage streams o f the two groups i s the benefit
attributable to IT1training.
73
0
Enrolled IT1 students who drop out before completing training or who do not get trade certification
earn lifetime wages o f the comparison group.
Each upgraded IT1 enrolls 100 students a year for five years, the period over which the investment
will be amortized. Note that a longer amortization period, such as 10 years, will reduce per student
cost in half.
25. The 2004 India National Statistical Survey (NSS-60) provides data to calculate the lifetime wage
profiles o f IT1pass-outs and the comparison group. The NSS-60 Round elicited for the first time several
questions about vocational training received by household members aged 15-29 with secondary and
higher secondary education but below graduate level. It asked whether respondents received vocational
training, type o f training, training institution attended, duration o f training, and degree, diploma or
certificate received. These data make i t possible to identify respondents who graduated from ITIs and
ITCs with trade certification, as well as a comparison group o f individuals o f similar age with the same
levels o f formal (general secondary) educational attainment. Since the interest i s in estimating lifetime
wages, the sample i s restricted to those respondents who worked for wages and salaries last week, for
whom hours-adjusted monthly wages can be calculated.
26. Figure 9.1 shows, for the IT1 pass-out and comparison groups, the hours-adjusted average monthly
wage profiles, both actual averages as well as their statistically-smoothened equivalents. For expositional
simplicity, the figures combine the data from both males and females, and the IT1 pass-out group i s
restricted to the NSS-60 sample that completed 2-year training courses (the course duration that upgraded
ITIs will provide under the Project). Since these wage profiles only cover a maximum o f 11 years o f
work experience (the sample i s restricted to those aged 29 years and below), the fitted model from Figure
9.1 i s used in Figure 9.2 to extrapolate wages profiles over the assumed lifetime o f 40 years o f
experience.
27. Lifetime wages must be discounted to the present for any cost-benefit comparisons since costs are
incurred today while the benefits to IT1 pass-outs are only realized over a long period o f time. Real
discount rates o f 5 and 7 percent (inflation-adjusted) are used to calculate the present values o f lifetime
wages for the IT1pass-out and comparison groups. These present values may be interpreted as baseline
estimates prevailing prior to Project implementation. When ITIs are upgraded under the Project, the
anticipated improvements in IT1 internal efficiency (higher rates o f training completion and trade
certification) and external efficiency (improved labor market outcomes in terms o f employment and
wages) should lead to additional gains in the present values o f lifetime wages o f IT1pass-outs relative to
that o f the comparison group. H o w large these incremental gains are will depend upon different scenarios
about the attainment o f several key performance indicators (KPIs) by the 400 upgraded ITIs.
74
Figure 9.1 Average monthly wages by potential experience
Sample of males and females combined
4500
4000
3500
3000
2500
2000
1500
1000
500
0
0
1
IT1training
+no
2
-st- 2 yr
3
4
5
6
IT1training -Log.
7
8
9
1
(no IT1training) -Log.
0
1
1
(2 yr IT1training)
Figure 9.2 Predicted annual wages by potential experience
Sample of males and females combined
60000
50000
$
40000
n
dC
30000
f
-
20000
m
10000
0
\
3
4
2
9 \? 3,
4
,
4
\e,
$\
$
3
$4
r$
$9 3\
flJ
d9
j
yrs of experience
I -no
rn training --)i-- 2 yr rn training
I
28. Table 9.6 provides comparisons o f the present values o f lifetime wages o f pass-outs from two-year
IT1 courses and the comparison group. The first three columns o f panel-A report the present values o f
lifetime wages using real discount rates o f 5 and 7 percent, separately for the t w o groups. Note that the
real discount rate used can dramatically reduce the present value o f lifetime wages for IT1 pass-outs from INR 641 thousand at 5 percent to INR 479 thousand at 7 percent. Nonetheless, for these two
discount rates, IT1pass-outs receive lifetime wages that are about 20 percent higher than the wages o f the
comparison group.
75
Present values of wages
(over 40 years)
Real discount rate
7Yo
A. Lifetime Wages (1,000 IR)
Comparison group
ComDarison
erouD
IT1pass-outs
Returns to I T I traininp
B. Baseline Adjustments [l]
58.7 % get trade certificate
Returns to I T I training
2 1.9% get job within 1 year
Returns to I T I training
I
5%
539.6
641.6
102.0
400.6
479.5
599.5
446.9
78.9
56.0
46.3
628.2
466.3
88.6
65.7
Net present values of wage
differential
(less per student cost of INR 69,000)
Real discount rate
5%
7yo
33.0
9.9
-I3.0
-22.7
19.6
-3.3
29. T h e difference in lifetime wages - ranging between INR 102 and 79 thousand- are the returns to IT1
training (shown in italics). The next three columns o f the table report the net present value o f these wage
differentials, that is, the incremental present values o f wages from IT1training less the per student cost o f
IT1upgrading o f INR 76,667. At 5 percent, the net present value i s INR 33 thousand after subtracting per
student cost; at 7 percent, net present value falls t o just INR 10 thousand.
30. In panel-B o f Table 9.6, these simple wage comparisons are adjusted to reflect the fact that not all IT1
students complete training with trade credentials, and o f those that do, only a fraction secure employment
within 12 months. The baseline IT1 survey indicates that, on the average, only 58.7 percent o f IT1
students complete their two-year training course and pass their trade tests. They get the lifetime wages o f
the IT1 pass-outs in panel A, while those that do not complete training nor get trade credentials are
assumed (see assumption 3) to follow the lifetime wage profiles o f the comparison group. W e incorporate
this baseline measure o f IT1internal efficiency by computing the weighted average o f lifetime wages for
the two groups, with the proportions o f students getting or failing to get trade certification as weights, and
then using this downward-adjusted IT1wage profile to estimate the returns to training. Similarly, the IT1
tracer study shows that only 21.9 percent o f IT1 pass-outs find employment within 12 months. It i s
assumed that this group gets the IT1wage profile while the group that takes longer than 12 months simply
looses the first year o f earnings. The IT1 wage profile i s weighted to reflect the employment histories o f
these two groups, and used to recalculate the returns to IT1training.
31. Panel B makes several points. First, the adjustment to reflect l o w rates o f training completion and
trade certification has very large negative effects on the returns to IT1 training. I t reduces the average
returns to IT1training by between 41-45 percent, depending upon the discount rate used. For example, at
a 5 percent discount rate, the adjusted IT1 lifetime wages fall from INR 102 to 56 thousand, or by about
45 percent. Second, after taking into account per student cost, the net present value o f wages from
training, adjusted for training completion and trade certification, i s invariably negative for the range o f
discount rates considered - minus INR 13 to 23 thousand. Improving the internal efficiency o f ITIs can
76
thus have large positive effects o n the returns t o training, and consequently o n the rate o f return t o
upgrading ITIs. Finally, the adjustment for time-to-employment has a relatively small negative impact o n
the returns to IT1 training. With this adjustment, net present values f r o m training are only positive (INR
19 thousand) for a 5 percent discount rate; at a 7 percent discount rate, the cost o f training exceeds the
wage benefits t o IT1pass-outs and the net present value turns negative (minus INR 3 thousand).
32. The third panel C shows the results, other things being equal, o f several different scenarios about the
potential lifetime wage effects o f improved training provided by upgraded ITIs. Three scenarios are
considered - starting pay o f IT1 pass-outs increases by 10, 15 and 20 percent over the baseline starting
pay. In all scenarios, and for the discount rates considered, increased starting pay results in higher returns
t o IT1 training that exceed the per student cost o f IT1 upgrading, that is, positive net present values o f
incremental lifetime wages f r o m IT1training.
VI. Rate of Return Simulations with Different Scenarios
33. The following sensitivity analysis focuses o n the rates o f return f r o m the joint effects o f attaining
different combinations o f the three KPI scenarios using a range o f real discount rates for lifetime wages.
The previous analysis looked at the individual effects o f each KPI, other things remaining constant. Here,
the interest i s o n the combined effects o f the different outcome indicators, which upgraded ITIs, are
designed t o address. The low, medium and high case scenarios considered for each KPI measured
relative to the baseline are shown in Table 9.7.
34. Table 9.8 reports the results o f simulations with different combinations o f the KPI scenarios at 5 and
7 percent real discount rates. To simplify exposition with such a large number o f combined KPI
permutations, the table only shows the rate o f return estimates which take, as given, the l o w case scenario
o f the 2nd KPI, namely, that 25 percent o f IT1pass-outs find employment within 12 months. The earlier
analysis indicated (and results not reported here confirmed) that the results are n o t particularly sensitive t o
changes in this scenario. Instead, the table focuses o n the simulations with different combinations o f the
1'' and 31d KPI. The columns o n the left are the retums to IT1 training - the incremental gain in the
lifetime wages o f IT1 pass-outs relative to the comparison group - and the columns o n the right the
corresponding rate o f returns (ROR) - the difference between returns and per student cost, measured as a
percentage o f per student cost o f IT1 upgrading. The combined KPI scenarios that yield positive rate o f
returns are shaded in green.
77
78
Annex 10: Safeguard Policy Issues
INDIA: Vocational Training Improvement Project
Social Development
1. Equity Assurance Plan (covering Indigenous Peoples). As the Project i s national in scope and
focuses on a specific set o f institutions, an Equity Assurance Plan (EAP) has been developed to meet the
requirements o f O.P. 4.12 to ensure commensurate benefits to tribal people, scheduled castes and women.
T h e EAP goes beyond IPS,aiming to improve equity for all disadvantaged groups. Improving the internal
efficiency o f the I T I s would help to improve the overall situation o f disadvantaged students. T o ascertain
this, progress monitoring in the Project will separately examine the progress o f SC, ST and women
students. The computerized database which starts at the I T I s and i s aggregated at the State and national
levels will provide all relevant data disaggregated by Malememale and SC/ST/General categories. Some
institutional baseline data i s already available, and the 2006 tracer study o f two previous batches o f IT1
graduates provides a basis to examine trends in employment outcomes among these groups. In addition
to these general improvements to help disadvantaged students, the social assessment led to the
formulation o f some specific activities that would be undertaken by the Project to improve their situation
and outcomes. These comprise the EAP and are presented in Table A1O.l. The NPIU and all SPIUs
would include one professional each who would oversee implementation o f the EAP, compliance with the
resettlement requirement (see below) and the EMF. Further details o f the Plan such as the implementation
steps, time frames and responsibilities are provided in Section IV (Equity Assurance Plan) o f the Project
Implementation Plan (dated April 18, 2007). The Financing Agreement would covenant implementation
and monitoring o f the EAP.
2. Involuntary Resettlement. The Project would not finance any major c i v i l works but anticipates the
construction o f some extensions or additional facilities at existing institutions o n land that i s already in
their possession. Consequently, n o land acquisition or involuntary resettlement i s expected. T o ascertain
this, a site review will be conducted by the Central or State authorities as part o f all c i v i l works
preparation to ensure that: (a) legal title to the site i s clearly in the name o f the institution or relevant
authority; and (b) that the site i s free o f encumbrances, including squatters and encroachers, and that n o
one would incur a loss o f residence or livelihood as a result o f the proposed construction. A prescribed
format would be utilized and copies o f the filled format for all proposed construction sites would be sent
to the Central authorities and made available to the Bank’s semi-annual review missions. In the event that
any proposed construction site houses or provides livelihood to any person, an alternative site without any
encumbrances would be sought and used. The Financing Agreement will include a covenant to this effect.
Environment Management and Safeguards
3. EA Process and Outputs: Planning, development and management o f the Industrial Training
Institutes (ITIs) involve some important environmental obligations. In order to fulfill these requirements,
integration
the environmental assessment was carried out for the project with the following objectives: (i)
o f the environmental principles during site selection, design, construction, operation and maintenance o f
the IT1 buildings; (ii)incorporation/ inclusion o f the industry-specific environmental, health, and
occupational safety issues as well as demand-driven industry-specific environmental issues relevant for
international benchmarking o f the industries in the curriculum for the improved vocational education
expanding and augmenting the current good practices with regard to environment, health
system and; (iii)
and safety aspects.
4. In this context, the environmental assessment study covered review o f standards, statutory and other
provisions; assessment o f existing situation through site visits and consultation with various stakeholders;
79
documentation o f current practices and; preparation o f an Environment Management Framework (EMF).
These decision-malung tools would help in making the project an environmentally sound and sustainable
one.
5. EnvironmentalParameterdAspects Assessed: Some o f the important parameters that were assessed
during the EA survey and field work include location and site planning; accessibility; building design and
maintenance (particularly materials used, ventilation, lighting, fire safety); drainage/water logging;
provision and maintenance o f basic facilities (water, sanitation and waste disposal); repair work practices;
availability o f class room and laboratory/workshop space per student; resource consumption (energy and
water) and; over-all ambience and cleanliness in the campus.
6. These parameters were assessed for a sample base o f 19 ITIs. These were selected o n the basis o f
criteria such as geographic location (urban/rural/hilly/coastal/ flood-prone); climatic conditions
(hot/humiddry/aridwarm); polluting tradedpollution potential (chemical, plastic, hospitality, civil,
automobile, etc.); and status o f the IT1(whether upgraded t o COE or not).
7. The exiting coverage o f environmental, health and occupational safety issues in the present course
curriculum was reviewed in detail. A detailed review o f relevant acts, rules, manuals, standards and
guidelines at the national level and operational policies o f the Bank was also carried out to assess the
various mandatory as well as suggestive provisions that could be suitably incorporated into the EMF for
the project.
8. EnvironmentalIssues and Key Findings o f EA: A majority o f environmental issues in the project
primarily pertain to: (i)
poor site planning and design (locationkite planning/accessibility/design); (ii)
lack o f proper maintenance o f buildings and associated services; (iii)
improper resource consumption and;
(iv) lack o f environmental augmentative measures.
9. The review o f legal provisions, codes and guidelines revealed that while some provisions are being
largely adhered to (such as built-up space available per student), some others like siting (locktion in flood
prone areas), use o f appropriate construction material, fire safety, access requirement for physically
challenged and provisionhse o f safety gear need attention.
10. T h e review o f the existing curriculum revealed that even though the course contents have been
revised recently, the content and coverage o f EHS issues i s not sufficient. The curriculum needs inclusion
o f more elaborate and relevant trade specific environmental, health, occupational safety concepts such as
EMS-14000, good house keeping and OSHAS. The industry-level consultation exercise at various
locations also highlighted the need for an improved curriculum with national or global norms o f
occupational health and safety and environmental management practices.
11. Environment Management Framework (EMF): Based on the review o f national standards; field
survey and assessment and; consultation with stakeholders, an EMF has been developed for the project.
The framework provides a useful set o f measures, which would help in preventing, minimizing andor
managmg various environmental, health and safety concerns faced during construction, operation and
maintenance o f I T I s .
12. The EMF prepared for the project comprises o f the following components:
0
0
Framework for compliance with the existing national standards and norms
Framework for up-gradinglconstruction activities
Framework for better campus environment management
80
Institutional arrangements for Implementation and compliance monitoring
Budgetary requirements for EMF implementation
Public disclosure policy
13. T h e major EMF recommendations are as follows:
14. Short Term Actions: (a) National level training and capacity building for effective environmental
management; (b) Development o f trade specific EHS course content and; (c) Implementation
arrangements for environment management at the DGE&T and State Directorate level.
15. Long Terms Actions: (a) Setting-up o f a Best IT1 Award to be given each year to 3-5 ITIs based on
achievements in project implementation and compliance with the EMF; and (b) Initiation o f “ITI- Green
Newsletter” for experience sharing.
16. Some other key suggestions provided to improve the quality o f living and working environment in an
IT1campus include:
Improvement o f campus environment through provision o f better sanitation, drainage, water, power,
first aid, personal protective equipment (as relevant to specific trades), waste collection and disposal
arrangements, storage o f hazardous and inflammable materials/chemicals and barrier free access for
students with disability. The campus environment management plan may also consider landscaping
and tree plantation for overall aesthetic improvement.
Use o f appropriate materials and construction technology for c i v i l works (hazardous materials such as
asbestos should not be used).
Adoption o f safe construction andor repair practices.
Top soil stripping, stacking, preservation and re-use where additional construction would be taken-up
under the project.
Promote environmental augmentative measures like re-usehecycling o f materials; rain water
harvesting, electricity saving devices, etc.
Design o f services to achieve maximum efficiencies.
17. However, the environmental issues on a specific site would depend on the nature and number o f new
trades being introduced (particularly, if these are o f polluting nature); additional space requirement and
new construction; extent and type o f constructionhepair activity and; increase in student strength and
pressure o n basic facilities. Dependingupon the activities proposed in the Institutional Development Plan,
the appropriate measures as suggested in the EMF would apply on a case to case basis.
18. The EMF also recommends field testing o f the proposed framework for all identified geo-climatic
region (at least one IT1per region). It i s envisaged that learning from such field testing would enhance the
EMF for wider applications. Budgetary provisions for EMF implementation including training and
capacity building have been made.
19. Stakeholder Consultation: Consultation with various stakeholders was carried out as a part o f the
EA exercise through interviews, formal and informal discussions. T h e stakeholders consulted at the local
level included IT1 management (Principals, faculty and other staff); current students; recent graduates;
senior and middle level managersh-epresentatives o f the industry. The consultation at the central or nodal
level was carried out through a national level workshop at New Delhi. This workshop was organized in
January 2007 and the participants included officials o f DGE&T, officials from concerned State
Directorates and the representatives o f national level industry associations such as C I I and FICCI. These
consultations have provided useful inputs in developing the EMF for the project.
81
20. Implementation Arrangements: The DGE&T will assume the overall responsibility for adequate
maintenance o f the personnel and resources required to supervise, monitor and implement EMF.
Management o f environmental aspects shall be addressed by designating an Environment Officer, who
will co-ordinate, monitor and provide support for: (a) satisfactory implementation o f the EMF; (b)
orientation and training for field level staff o f the State Directorates responsible for vocational training
and project ITIs and other stakeholders and; (c) reporting and documentation. The DGE&T will share
with the Bank bi-annual reports, which will include a section o n EMF implementation and related
activities.
2 1. Training and Capacity Building: A robust training and capacity building plan i s required to ensure
effective implementation o f EMF o n the ground. Some key areas that need to b e covered under the
environmental component o f the project training plan would cover environmentally sensitive site
selection and building design; campus environment management (issues and measures) and; trade specific
environmental and occupational safety issues including good and bad practices.
82
m
00
Annex 11: Project Preparation and Supervision
INDIA: Vocational Training Improvement Project
Planned
412 012006
PCN review
Initial P I D to PIC
Initial ISDS to PIC
Appraisal
Negotiations
BoardlRVP approval
Planned date o f effectiveness
Planned date o f mid-termreview
Planned closing date
3/6/2007
411512007
610512007
713012007
11I3Ql2009
12/31/2012
Actual
510412006
611312006
811512006
3/6/2007
411612007
Key institutions responsible for preparation o f the project:
Ministry o f Labor and Employment (MOLE),India
Bank staff and consultants who worked on the project included:
Name
Nalin Jena
Hong Tan
Kin Bing Wu
Philip B. O’Keefe
Sangeeta Goyal
Amit Dar
Shashi K. Shnvastava
M a m Chand
Meera Chattqee
Tanuj Mathur
Tapas Paul
Yegeniya Savchenko
Alan Abrahart
S. A. A. Alvi
Renu Gupta
Bertha Mburugu
Robin Horn
Gordon Betcherman
Ahmad Ahsan
Title
Unit
Operations Officer (co-TTL)
Lead Economist (co-TTL)
Lead Education Specialist
Lead Social Protection Specialist
Economist
Lead Education Economist
Senior Education Specialist
Sr. Procurement Specialist
Sr. Social Dev. Specialist
Financial Management Specialist
Environmental Specialist
ETC (Economist)
Consultant (Training Specialist)
Consultant (Training Specialist)
Program, Assistant
Program, Assistant
Sector Manager
Lead Economist
Lead Economist
SASHD
WBFP
SASHD
SASHD
SASHD
SASHD
SASHD
SARPS
SASES
SARFM
SASES
SASHD
SASHD
SASHD
SASHD
SASHD
HDNED, QER Panel Chair
ECSHD, Peer Reviewer
SASPR, Peer Reviewer
Bank funds expended to date on project preparation:
1. Bank resources: $428,178
2. Trust funds: : $125,000
3. Total: $553,178
Estimated Approval and Supervision costs:
4. Remaining costs to approval: $15,000
5. Estimated annual supervision cost: $120,000
85
Annex 12: Documents in the Project File
INDIA: Vocational Training Improvement Project
India: Country Assistance Strategy, September 2004. The World Bank
DGE&T (2005). Externally Aided Project for Reforms and Improvement in Vocational Training Services
rendered by Central and State Governments. Proposal o f the Directorate General o f Employment and
Training, Ministry o f Labor and Employment, India.
C I I (2005). Position Paper on Managing I T I s . Confederation o f Indian Industries Position Paper.
DGE&T (Various Years). Annual Report. Report o f the Directorate General o f Employment and
Training, Ministry o f Labor and Employment, India.
DGE&T (2003). Trade Apprenticeship in India under the Apprenticeship Training Scheme. Directorate
General o f Employment and Training, Ministry o f Labor and Employment, India.
DGE&T (2003).
Tracer Study of Trained Apprentices to Assess the Effectiveness of Apprenticeship
Training Scheme. Directorate General o f Employment and Training, Ministry o f Labor and Employment,
India.
EDCil (2005). Studying the Eflectiveness of Vocational Training in the Private Sector in India: Analysis
of Data in Eight States. Worlung Paper prepared for the World Bank by Educational Consultants India
Limited.
EDCil (2005). Case Study on Role of Private Providers of Training in Rajasthan and Tamil Nadu.
Worlung Paper prepared for the World Bank by Educational Consultants India Limited.
FICCI (2002). Survey of Employers on Education and Skill Needs. Survey Conducted by the Federation
o f Indian Chamber o f Commerce and Industry.
ILO( 2003). Industriual Training Institutes in India: The Efficiency Study Report. ILO Subregional
Office for South Asia, New Delhi
Middleton, J., A. Ziderman, and A. V. Adams (1993). Skills for Productivity: Vocational Education and
Training in Developing Countries. Oxford University Press and World Bank, Washington DC.
MHRD (2003). Project Implementation Plan of National Program on Vcational Education and Training.
Ministry o f Human Resourceds Development, India.
Pillay, G. (2005). Reforms in the Vocational Education and Training System in Korea. Draft Working
Paper, World Bank.
Planning Commission o f India (2002). Report of the Special Group on Targeting Ten Million
Employment Opportunities per Year over the I Oth Plan Period. May, 2002
Planning Commission o f India (2002). Tenth Five Year Plan.
86
Planning Commission o f India (2002). Economic Survey
Tan, H. and Savchenko, Y. (2005). In-Service Training in India: Evidence from the India Firm-Level
Investment Climate Survey. World Bank Working Paper.
World Bank (1999). India Vocational Training Project: Implementation Completion and Results Report
World Bank (2004).
Washington, DC.
India: Investment Climate and Manufacturing Industry.
South Asia Region,
World Bank (2006) Skill Development in India-The Vocational Education and Training System.
87
Annex 13: Statement o f Loans and Credits
INDIA: Vocational Training Improvement Project
Difference between
expected and actual
disbursements
Original Amount in US$ Millions
FY
Pumose
PO75060
2007
RCH I1
PO90585
2007
Punjab State Roads Project
PO90592
2007
PO78539
Proiect ID
IBRD
IDA
SF
GEF
Cancel.
Undisb.
Orig.
Frm. Rev’d
0.00
360.00
0.00
0.00
0.00
363.72
10.00
0.00
250.00
0.00
0.00
0.00
0.00
250.00
3.07
0.00
Punjab Rural Water Supply & Sanitation
0.00
154.00
0.00
0.00
0.00
157.40
21.46
0.00
2007
TE3 I1
0.00
170.00
0.00
0.00
0.00
159.29
-1 1.oo
0.00
PO90768
2007
TNIAM W A R M
335.00
150.00
0.00
0.00
0.00
485.92
0.00
0.00
PO83187
2007
Uttaranchal RWSS
0.00
120.00
0.00
0.00
0.00
127.33
4.83
0.00
PO78538
2007
National HIV / A I D S Control Project III
0.00
250.00
0.00
0.00
0.00
256.52
0.00
0.00
PO71160
2007
Kamataka Health Systems
0.00
141.83
0.00
0.00
0.00
144.20
2.20
0.00
PO75174
2007
India AP DPL 111
150.00
75.00
0.00
0.00
0.00
75.64
-151.17
0.00
PO97036
2007
Orissa Socio-Econ Dev Loan I1
150.00
75.00
0.00
0.00
0.00
75.36
-150.65
0.00
P100789
2007
AP Community Tank Management
Project
94.50
94.50
0.00
0.00
0.00
190.39
0.00
0.00
PO79708
2006
TN Empwr & Pov Reduction
0.00
120.00
0.00
0.00
0.00
111.50
-2.37
0.00
PO83780
2006
TN Urban 111
300.00
0.00
0.00
0.00
0.00
262.16
37.91
0.00
PO79675
2006
Kam Municipal Reform
2 16.00
0.00
0.00
0.00
0.00
198.26
1.19
0.00
0.00
400.00
0.00
0.00
0.00
0.00
313.55
-86.45
Kamataka Panchayts Strengthening Proj
0.00
120.00
0.00
0.00
0.00
98.54
-25.73
0.00
F A L G Brick Project
0.00
0.00
0.00
0.00
0.00
4.40
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2.88
0.00
0.00
0.00
200.00
0.00
0.00
0.00
185.05
-11.18
0.00
Mid-Himalayan (HP) Watersheds
0.00
60.00
0.00
0.00
0.00
53.41
3.20
0.00
2005
TN HEALTH SYSTEMS
0.00
110.83
0.00
0.00
20.06
79.91
23.53
26.54
PO73370
2005
Madhya Pradesh Water Sector
Restructurin
394.02
0.00
0.00
0.00
0.00
363.81
81.70
0.00
PO73651
2005
DISEASE SURVEILLANCE
0.00
68.00
0.00
0.00
0.00
61.38
26.47
0.00
PO77856
2005
Lucknow-Muzaffarpur National Highway
620.00
0.00
0.00
0.00
0.00
453.33
-30.00
0.00
PO77977
2005
Rural Roads Project
99.50
300.00
0.00
0.00
0.00
212.41
-17.38
0.00
PO84632
2005
Hydrology I1
104.98
0.00
0.00
0.00
0.00
94.04
39.06
-2.07
PO84790
2005
M A H A R WSIP
325.00
0.00
0.00
0.00
0.00
292.42
9.42
0.00
PO84792
2005
Assam Agric Competitiveness
0.00
154.00
0.00
0.00
0.00
141.81
42.1 1
0.00
PO86518
2005
IN SME Financing & Development
120.00
0.00
0.00
0.00
0.00
5.00
3.33
0.00
PO94513
2005
India Tsunami ERC
PO73776
2004
A L L A H A B A D BYPASS
PO78550
PO86414
2006
PO78832
2006
PO90163
2006
PO91453
2006
VSBK Cluster Project
PO92735
2006
NAIP
PO93720
2006
PO75058
Power System Development Project 111
0.00
465.00
0.00
0.00
0.00
405.20
255.54
0.00
240.00
0.00
0.00
0.00
0.00
121.26
84.46
0.00
2004
Uttar Wtrshed
0.00
69.62
0.00
0.00
0.00
61.53
1.11
0.00
PO73369
2004
M A H A R RWSS
0.00
181.00
0.00
0.00
0.00
71.01
-9.12
0.00
PO50655
2004
RAJASTHAN HEALTH SYSTEMS
DEVELOPMENT
0.00
89.00
0.00
0.00
0.00
69.54
43.65
0.00
PO79865
2004
GEF Biosafety Project
PO82510
2004
Kamataka UWS Improvement Project
PO50649
2003
PO67606
PO76467
0.00
0.00
0.00
1.oo
0.00
0.49
0.48
0.00
39.50
0.00
0.00
0.00
0.00
16.48
10.98
0.00
TN ROADS
348.00
0.00
0.00
0.00
0.00
239.02
103.55
0.00
2003
UP ROADS
488.00
0.00
0.00
0.00
0.00
291.12
202.93
0.00
2003
Chatt DRPP
0.00
112.56
0.00
0.00
20.06
78.11
57.02
0.00
PO71272
2003
AP R U R A L POV REDUCTION
0.00
150.03
0.00
0.00
0.00
25.43
0.09
0.00
PO72123
2003
TecWEngg Quality Improvement Project
0.00
250.00
0.00
0.00
40.11
94.99
28.90
-47.06
PO75056
2003
Food & Drugs Capacity Building Project
0.00
54.03
0.00
0.00
0.00
40.80
26.39
0.00
PO73094
2003
AP Comm Forest Mgmt
0.00
108.00
0.00
0.00
0.00
46.59
2.50
0.00
PO74018
2002
Gujarat Emergency Earthquake
Reconstruct
0.00
442.80
0.00
0.00
115.24
97.34
135.90
37.98
PO72539
2002
KERALA STATE TRANSPORT
255.00
0.00
0.00
0.00
0.00
116.95
57.62
0.00
PO71033
2002
KARN Tank Mgmt
0.00
98.90
0.00
0.00
25.07
53.36
51.89
-0.06
PO50647
2002
UPWSRP
0.00
149.20
0.00
0.00
40.11
97.10
111.21
0.00
PO69889
2002
M I Z O R A M ROADS
0.00
60.00
0.00
0.00
0.00
24.31
8.37
0.00
PO50653
2002
K A R N A T A K A RWSS I1
0.00
151.60
0.00
0.00
15.04
64.37
50.41
0.00
PO40610
2002
RAJ WSRP
0.00
140.00
0.00
0.00
15.04
74.25
45.15
0.00
PO50668
2002
MUMBAI URBAN TRANSPORT
PROJECT
463.00
79.00
0.00
0.00
0.00
359.46
240.27
0.00
381.00
0.00
0.00
0.00
101.00
19.51
120.51
19.51
0.00
64.90
0.00
0.00
0.00
6.67
0.33
-2.1 1
KERAJA RWSS
0.00
65.50
0.00
0.00
12.27
7.89
11.36
-1.97
PO10566
2001
Gujarat Highways
PO50658
2001
TECHN EDUC 111
PO55454
2001
PO55455
2001
Rajasthan DPEP I1
0.00
74.40
0.00
0.00
0.00
22.82
11.99
0.og
PO59242
2001
MPDPIP
0.00
110.10
0.00
0.00
20.06
6.16
12.86
-6.87
PO67216
2001
KAR WSHD DEVELOPMENT
0.00
100.40
0.00
0.00
20.06
44.94
47.93
31.07
PO70421
2001
Kamataka Highways
360.00
0.00
0.00
0.00
0.00
21.72
21.72
0.00
PO71244
2001
Grand TrunkRoad Improvement Project
589.00
0.00
0.00
0.00
12.53
149.62
162.15
0.00
PO59501
2000
T A for Econ Reform Project
0.00
45.00
0.00
0.00
12.03
15.08
22.73
11.39
10.18
PO50657
2000
UP Health Systems Development Project
PO49770
2000
REN EGY I1
PO10505
2000
RAJASTHAN DPIP
PO09972
2000
Natl Highways Ill
PO50646
1999
Up
Sodic Lands I1
Total:
0.00
110.00
0.00
0.00
30.09
31.27
50.33
80.00
50.00
0.00
0.00
26.00
20.09
43.96
-3.60
0.00
100.48
0.00
0.00
0.00
25.17
14.99
15.01
516.00
0.00
0.00
0.00
25.16
91.26
116.42
116.42
0.00
194.10
0.00
0.00
0.00
0.60
7,318.50
6,238.78
0.00
1.00
549.93
8,131.14
-3.16
-6.22
1,966.97
198.14
INDIA
STATEMENT OF IFC’s
H e l d and Disbursed Portfolio
In M i l l i o n s o f U S Dollars
Committed
Disbursed
IFC
IFC
Loan
Partic.
FY Approval
Comanv
Loan
EQuihl
Quasi
Partic.
Equity
Quasi
2005
ADPCL
39.50
7.00
0.00
0.00
0.00
0.00
0.00
0.00
2006
AHEL
0.00
5.08
0.00
0.00
0.00
5.08
0.00
0.00
2005
AP Paper Mills
35.00
5.00
0.00
0.00
25.00
5.00
0.00
0.00
2005
APIDC Biotech
0.00
4.00
0.00
0.00
0.00
2.01
0.00
0.00
2002
ATL
13.81
0.00
0.00
9.36
13.81
0.00
0.00
9.36
2003
ATL
1.oo
0.00
0.00
0.00
0.68
0.00
0.00
0.00
2005
ATL
9.39
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2006
Atul Ltd
16.77
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2003
BHF
10.30
0.00
10.30
0.00
10.30
0.00
10.30
0.00
2004
BILT
0.00
0.00
15.00
0.00
0.00
0.00
15.00
0.00
2001
BTVL
0.43
3.98
0.00
0.00
0.43
3.98
0.00
0.00
2003
Balrampur
10.52
0.00
0.00
0.00
10.52
0.00
0.00
0.00
200 1
Basix Ltd.
0.00
0.98
0.00
0.00
0.00
0.98
0.00
0.00
2005
Bharat Biotech
0.00
0.00
4.50
0.00
0.00
0.00
3.30
0.00
1984
Bihar Sponge
5.70
0.00
0.00
0.00
5.70
0.00
0.00
0.00
0.59
0.00
0.00
0.00
12.40
1.50
0.00
0.00
0.00
CCIL
7.00
2.00
0.00
12.40
7.00
2.00
0.00
CESC
4.61
0.00
0.00
0.00
4.61
0.00
0.00
0.00
1992
CESC
6.55
0.00
0.00
14.59
6.55
0.00
0.00
14.59
2004
CGL
14.38
0.00
0.00
0.00
7.38
0.00
0.00
0.00
2004
CMScomputers
0.00
10.00
2.50
0.00
0.00
0.00
0.00
0.00
2002
COSMO
2.50
0.00
0.00
0.00
2.50
0.00
0.00
0.00
2005
COSMO
0.00
3.73
0.00
0.00
0.00
3.73
0.00
0.00
2006
Chennai Water
24.78
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2003
DQEL
0.00
1.50
1.50
0.00
0.00
1.50
1.50
0.00
0.00
0.00
0.00
2003
CCIL
2006
1990
2005
DSCL
2006
DSCL
15.00
2005
Dabur
0.00
2003
Dewan
8.68
2006
Federal Bank
0.00
2001
GTF Fact
2006
GTF Fact
1994
30.00
0.00
0.00
30.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
14.09
0.00
0.00
0.00
14.09
0.00
0.00
0.00
0.00
0.00
8.68
0.00
0.00
0.00
28.06
0.00
0.00
0.00
23.99
0.00
0.00
0.00
1.20
0.00
0.00
0.00
1.20
0.00
0.00
0.00
0.00
0.99
0.00
0.00
0.00
0.99
0.00
GVK
0.00
4.83
0.00
0.00
0.00
4.83
0.00
0.00
2003
HDFC
100.00
0.00
0.00
100.00
100.00
0.00
0.00
100.00
1998
IAAF
0.00
0.47
0.00
0.00
0.00
0.30
0.00
0.00
2006
IAL
0.00
9.79
0.00
0.00
0.00
7.70
0.00
0.00
1998
IDFC
0.00
10.82
0.00
0.00
0.00
10.82
0.00
0.00
2005
IDFC
50.00
0.00
0.00
100.00
50.00
0.00
0.00
100.00
0.00
IHDC
6.94
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2006
IHDC
7.90
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2006
Indecomm
0.00
2.57
0.00
0.00
0.00
2.57
0.00
0.00
1996
India Direct Fnd
0.00
1.10
0.00
0.00
0.00
0.66
0.00
0.00
2001
Indian Seamless
6.00
0.00
0.00
0.00
6.00
0.00
0.00
0.00
2006
JK Paper
15.00
7.62
0.00
0.00
0.00
7.38
0.00
0.00
2005
K Mahindra INDIA
22.00
0.00
0.00
0.00
22.00
0.00
0.00
0.00
0.00
2005
WIT
11.00
2.50
0.00
0.00
8.00
2.50
0.00
2003
L&T
50.00
0.00
0.00
0.00
50.00
0.00
0.00
0.00
2006
LGB
14.21
4.82
0.00
0.00
0.00
4.82
0.00
0.00
2006
Lok Fund
0.00
2.00
0.00
0.00
0.00
0.00
0.00
0.00
2002
MMFSL
7.89
0.00
7.51
0.00
7.89
0.00
7.51
0.00
2003
MSSL
0.00
2.29
0.00
0.00
0.00
2.20
0.00
0.00
2001
MahInfra
0.00
10.00
0.00
0.00
0.00
0.79
0.00
0.00
Montalvo
0.00
3 .OO
0.00
0.00
0.00
1.08
0.00
0.00
Moser Baer
0.00
0.82
0.00
0.00
0.00
0.82
0.00
0.00
Moser Baer
0.00
8.74
0.00
0.00
0.00
8.74
0.00
0.00
1996
1999
2000
2003
Moser Baer
12.75
10.54
0.00
0.00
12.75
10.54
0.00
0.00
Nevis
0.00
4.00
0.00
0.00
0.00
4.00
0.00
0.00
NewPath
0.00
9.31
0.00
0.00
0.00
8.31
0.00
0.00
2004
NewPath
0.00
2.79
0.00
0.00
0.00
2.49
0.00
0.00
2003
Niko Resources
24.44
0.00
0.00
0.00
24.44
0.00
0.00
0.00
2001
Orchid
0.00
0.73
0.00
0.00
0.00
0.73
0.00
0.00
1997
Owens Coming
5.92
0.00
0.00
0.00
5.92
0.00
0.00
0.00
2006
PSL Limited
15.00
4.74
0.00
0.00
0.00
4.54
0.00
0.00
2004
Powerlinks
72.98
0.00
0.00
0.00
64.16
0.00
0.00
0.00
2004
RAK India
20.00
0.00
0.00
0.00
20.00
0.00
0.00
0.00
1995
Rain Calcining
0.00
2.29
0.00
0.00
0.00
2.29
0.00
0.00
2004
Rain Calcining
10.00
0.00
0.00
0.00
10.00
0.00
0.00
0.00
10.28
0.00
0.00
0.00
0.00
0.00
0.00
2005
hmky
Ruchi Soya
3.74
0.00
9.27
0.00
0.00
0.00
6.77
0.00
0.00
2001
SBI
50.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
1997
SREI
3.21
0.00
0.00
0.00
3.21
0.00
0.00
0.00
2000
SREI
6.50
0.00
0.00
0.00
6.50
0.00
0.00
0.00
1995
Sara Fund
0.00
3.43
0.00
0.00
0.00
3.43
0.00
0.00
2004
SeaLion
4.40
0.00
0.00
0.00
4.40
0.00
0.00
0.00
0.00
2005
2001
Spryance
0.00
1.86
0.00
0.00
0.00
1.86
0.00
2003
Spryance
0.00
0.93
0.00
0.00
0.00
0.93
0.00
0.00
2004
Sundaram Finance
42.93
0.00
0.00
0.00
42.93
0.00
0.00
0.00
2000
Sundaram Home
0.00
2.18
0.00
0.00
0.00
2.18
0.00
0.00
2002
Sundaram Home
6.71
0.00
0.00
0.00
6.71
0.00
0.00
0.00
1998
TCW/ICICI
0.00
0.80
0.00
0.00
0.00
0.80
0.00
0.00
2005
TISCO
100.00
0.00
0.00
300.00
0.00
0.00
0.00
0.00
2004
UPL
15.45
0.00
0.00
0.00
15.45
0.00
0.00
0.00
1996
United Riceland
5.63
0.00
0.00
0.00
5.63
0.00
0.00
0.00
2005
United Riceland
8.50
0.00
0.00
0.00
5.00
0.00
0.00
0.00
2002
Usha Martin
0.00
0.72
0.00
0.00
0.00
0.72
0.00
0.00
2001
Vysya Bank
0.00
3.66
0.00
0.00
0.00
3.66
0.00
0.00
2005
Vysya Bank
0.00
3.51
0.00
0.00
0.00
3.51
0.00
0.00
1997
WN
0.00
0.37
0.00
0.00
0.00
0.37
0.00
0.00
1997
Walden-Mgt India
0.00
0.01
0.00
0.00
0.00
0.01
0.00
0.00
2006
iLabs Fund I1
0.00
Total portfolio:
956.52
20.00
0.00
0.00
0.00
0.00
0.00
0.00
249.41
42.30
536.35
604.74
175.91
38.60
236.35
Approvals Pending Commitment
Quasi
Partic.
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
0.00
Vysya Bank
0.00
0.00
0.00
0.00
2006
Federal Bank
0.01
0.00
0.00
0.00
200 1
G I Wind Farms
0.01
0.00
0.00
0.00
2004
Ocean Sparkle
0.00
0.00
0.00
0.00
2005
Allain Duhangan
0.00
0.00
0.00
0.00
0.01
0.00
0.00
FY Approval
Company
2004
CGL
0.01
2000
AFJCL
0.01
2006
Atul Ltd
2001
Loan
0.04
Total pending commitment:
91
Equity
Annex 14: Country at a Glance
INDIA: Vocational Training Improvement Project
POVERTY a n d SOCIAL
South
Asia
LOWincome
1094.6
730
604.2
1470
684
1005
2,353
560
1364
15
19
17
2.1
19
2.3
29
29
63
62
47
86
61
YB
PO
1P
29
63
66
45
a4
60
10
16
31
59
60
39
75
62
04
10
99
India
2005
Population. mid-year (millions)
GNI per capita (A tlas method, US$)
GNI (Atlas method, US$ billions)
Development dlamond'
Life expectancy
T
Average annual growth, 1999-05
Population (%I
Laborforce(%)
M o s t recent estimate (latest year available, 1999-05)
Poverty (%of population belownationalpovertyline)
Urban population (%of totalpopulation)
Life expectancyat birth (pars)
Infant mortality(perl0OOlive births)
Child malnutrition (%ofchildren under5)
Access 10 an impmvedwatersource (%ofpopulation)
Literacy(%ofpopulation age 69
Gross primatyenroiiment (%of school-age population)
Male
Female
05
GNI
per
capita
Gmss
primary
nroilment
Access to impmvedwatersource
-India
-Lowincome group
KEY ECONOMIC RATIOS a n d LONG-TERM TRENDS
GOP (US$ billions)
Gross capital formation/GDP
Exports of goods andserviceslGOP
Gross domestic savings/GDP
Gross national savings/GDP
Current account baiance/GDP
Interest payments/GDP
Total debt/GDP
Total debt service/exports
Present value of debt/GDP
Present value of debtiexports
1985
1995
227.2
23.7
5.4
8.5
B.9
355.2
26.5
25.1
26.4
311
33.3
805.7
33.4
20.3
32.4
34.7
-2.3
0.9
8.0
23.0
-16
14
26.6
27.8
-0.7
0.5
17.9
P.7
15.8
72.7
-13
0.8
6.3
P.6
0.7
57.3
no
2004
695.9
310
82
2005
I
E c o n o m l c ratios'
I
Trade
Indebtedness
1985-95 1995-05
(average annual growth)
GDP
GDP percapita
Exports of goodsandservices
5.5
3.4
0.9
6.0
4.3
D.5
2004
8.3
6.8
26.1
2005 2005-09
92
7.7
22.0
8.3
7.0
D6
STRUCTURE of the ECONOMY
(%of GDP)
Aoricuiture
Industry
Manufacturing
Services
Household final consumption expenditure
General gov't final consumption erpenditure
Imports of goods andservices
1985
1995
2004
201:
33.7
26.4
6.4
39.9
28.2
28.1
8.1
43.6
8.8
27.5
27.3
53.7
54.4
67.4
114
7.8
636
0.8
P.2
59.9
110
20.0
58.3
113
23.3
198545
1995-05
-India
Low-iicomegmup
~
7
Y
O
-GCF
'
02
03
04
06
-GDP
/w
/ G r o w t h o f exports and i m p o r t s (K)
(average annualgmwth)
Agriculture
industry
Manufacturing
Services
3.5
6.5
6.7
6.7
2.1
5.8
5.4
8.2
0.0
9.6
6.7
9.5
Household final consumption expenditure
General gov't final consumption eqenditure
Gross capital formation
Imports ofgoods andservices
5.7
4.2
5.4
9.9
5.2
5.5
6.3
0.0
3.8
5.4
18.7
22.3
ii
5.7
9.6
8.8
27.1
---Exports
-Inports
Note:2005data arepreiimlnaryestimates. Groupdataare to 2004.2005 Indicates 2005-06(Apr 110 Mar31).
+Thediamondsshowfourkeyindicatorr in thecountry(inboid)comparedwithits income-groupaverage. KdataaremIssing,thediamondwiIi
be incomplete.
92
1
1
fPPS
port and
32Jll
20 I1
2v5
2% oc3
29.737
43 6%
@To
7 526
0 930
no
a6
$35
a2
74
as
BALANCE of PAYMENTS
93
US$
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