ITI plan: States to get wake-up call

Labour and Employment Minister Oscar Fernandes will next week send letters to state governments asking them to expedite the preparation of lists of industrial training institutes (ITIs) that are to be upgraded with the help of industry.

The scheme is being interpreted as a programme of incremental privatisation and is facing resistance from several state governments.

A total of 1,396 government ITIs are to be upgraded through public-private partnerships in the 11th Plan. In the first year, 2007-08, 300 ITIs with a total outlay of Rs 750 crore were to be improved with guidance from the private sector.

But so far, only 11 states have sent their proposals along with the names of the companies that have proposed to take part in the process. No MoU has been signed with any industrial house so far.

The largest number of ITIs are to be upgraded in Maharashtra (54), followed by Uttar Pradesh (30). While Maharashtra has sent proposals for 46 ITIs, Uttar Pradesh is yet to respond. Only 11 states have sent a list of 168 ITIs, just over half the target for the fiscal.

Fernandes's letter to chief ministers says: "I request you to direct the departments/ministries concerned with the scheme in your state to expeditiously complete all necessary actions and send the proposals for release of interest-free loan to the industrial management committees (IMCs) to the Central government so that the target of covering 300 ITIs during 2007-08 can be achieved".

Reminding states of the number of ITIs that are to be upgraded this year, he has requested their active cooperation to promote skill development.

Meanwhile, industry partners who have agreed to take on the responsibility are awaiting the government response. "We want to upgrade seven ITIs in Rajasthan and Haryana. We sent our proposals in October and are waiting for the government's response so that we can sign the memorandum of agreement (MoA)," said Shantanu Prakash, CEO, Educomp Solutions, based in Gurgaon.

The Confederation of Indian Industry (CII), which is facilitating the upgrade of about 150 ITIs (to be carried out by its associated members), said the fear of losing control over ITIs was the reason for state governments' inertia.

"While industry is willing, some states like Karnataka are not so keen to participate in the process," said Col Harmit Singh Sethi, director and head, skills development, CII. Karnataka has been allocated 21 ITIs this year but it is yet to respond with the lists.

Ministry officials agreed states were the problem. "As the process has started only this year, it requires a lot of spade work. At one point, the finance officials expressed concern as the money will be sent directly to the institutes and not state governments, but things are moving now," said a senior official.

Under the scheme, for each ITI, an industry partner will lead the process of upgrade. After a memorandum of agreement (MoA) with the state and the industry partner, the Centre will provide an interest-free loan of Rs 2.5 crore to the institute to be repaid in 30 years.

States will delegate necessary powers to the institutes (with almost equal participation of industry and the government) according to the MoA, along with financial and academic autonomy. States will continue to own the upgraded ITIs as well.

Out of the 1,896 government ITIs in the country, 500 are being upgraded into centres of excellence (100 through government funds and 400 with the assistance of the World Bank) under a scheme launched in 2005-06. In the Budget speech of 2007-08, Finance Minister P Chidambaram announced upgrade of the remaining 1,396 ITIs through public-private partnerships in 11th Plan period. Accordingly, the ministry framed a scheme with an outlay of Rs 3,665 crore (Rs 3,490 crore for 1,396 ITIs at Rs 2.5 crore per ITI and Rs 175 crore for management, monitoring and evaluation of the scheme).