ITI upgrade plan a non-starter

Despite strong private sector interest and a Rs 750-crore Budget allocation, not a single agreement has been signed between the government and the private sector to upgrade 300 Industrial Training Institutes (ITIs) to centres of excellence within the target of this fiscal, which has three and a half months to run.

The delay raises questions about the government's plan to upgrade another 1,096 ITIs through the same public private partnerships (PPPs) in the next four years.

ITIs were set up with the objective of providing skilled and semi-skilled manpower to industry or to equip people for self-employment.

Industry has said it has shown keen interest in the programme, mainly to meet affirmative action commitments.

An official of the Federation of Chambers of Commerce and Industry (Ficci) said it has been waiting for the government's invitation to sign agreements for several months.

"We have told the government that we are willing to associate with the upgrade of more than 50 ITIs this year and we want to take up more ITIs in the coming years as well," the official said.

The Confederation of Indian Industry (CII) and the Associated Chambers of Commerce (Assocham) have also shown interest in the programme. "CII proposed to take up 150 ITIs, while Assocham wants to take up about 20 ITIs this year," a ministry official confirmed.

The delay is being blamed on the late response from the states and some changes made by the Cabinet in the scheme in October.

Meanwhile, the ministry of labour and employment, the implementing ministry, is no longer sure of the money allocated for the purpose.

After the announcement in Finance Minister P Chidambaram's Budget speech for 2007-08, the labour ministry framed a scheme to upgrade 1,396 government ITIs, with an outlay of Rs 3,665 crore spread over a five-year period.

The plan approved by the Cabinet involves identifying the ITIs and the Institute Management Committees (IMCs) as Societies.

Later, the Cabinet made changes to allow the management committees to fill 20 per cent of the seats. "These changes forced many states to revise whatever agreements they had drafted," a ministry official said.

Meanwhile, the states have crossed another deadline for sending in their final proposals on 30 November.

"The states are now sending their final lists of ITIs and we expect to sign the first agreement soon," the official added but refused to give a date.

The official was non-committal on how much money they can disburse by the end of the fiscal. Headed by an industry partner these IMCs will have both industry and government officials as members.

An interest-free loan of up to Rs 2.5 crore will be provided by the central government to the IMC, on the basis of an institute development plan prepared by it.

The loan carries a moratorium of 10 years and thereafter is paid in equal annual installments over 20 years.

IMCs will be given financial and academic autonomy by the state governments to manage the ITIs.

The state government will, however, define the role and responsibilities of all the parties and continue to regulate admissions and fees.

There are 1,896 government-run ITIs in the country of which 500 are already being upgraded to centres of excellence partly through government funds and partly through a World Bank scheme. The upgrade of the remaining 1,396 would have been a test case of the PPP model.