Leather sector occupies a very important place in the Indian economy on account of its substantial export earnings, potential for creation of employment opportunities and favorable conditions for its sustained growth. There is a large potential to increase the domestic production and exports, necessitating both the need for infusion of manpower as well as up gradation of existing employees.
It is estimated that close to 2.5 million people are presently employed both directly and indirectly in the Leather sector. About 1 million are estimated to be employed in the organized sector and the rest 1.5 million are in the un-organized product sector. Among the product sectors, footwear units tend to employ large number of people as compared to other segments. It is estimated that about 0.5 million persons are required in the Leather industry in the next five years.
Chairman, NMCC observed that sustaining the growth in manufacturing at the present level of 12% - 14% is not feasible without the availability of manpower with the right skill set. Around 10 million persons pass out of schools every year and they require training at various levels. He underlined the fact that at a very high level, the Hon’ble Prime Minister has been reiterating the importance of skill development. Shying away from addressing this problem will cause a great damage to the country, its economy and its potential for growth. History tells us that if there is skilled work force, there is development.
While the need for appropriately trained and skilled manpower is felt across all levels, the shortage is felt more acutely at the lower level of semi-skilled work force. Owing to large export orders flooding the Indian Leather product units, there is acute shortage of semi-skilled workforce.
HRD mission would target potential work force in the rural areas and would lay stress on skill development and technical development. By providing Output linked financial assistance, these people in rural areas would be trained and placed into employment in the sector.
Large entrepreneurs seldom resort to orientation and on-the-job training. As far as Institutional training for the middle level technicians is concerned, the capacity of the Institutes imparting technical education and training is grossly inadequate as compared to the demand for technicians in Leather industry. Therefore, Human Resource Development strategy needs to cover off-site training facilities as well as on-site training. On-site training should be linked with incentives to the entrepreneurs so that, there is greater degree of compliance.
Indian Leather and footwear industry are mostly in the unorganized sector, which makes the role of Government in training efforts imperative. As the workers and artisans working in the unorganized sector use traditional techniques and manufacturing methods, their products are not as per the international standards, sizes and norms. Further, their productivity is also low due to lack of up gradation of tools & equipments. The expected outcome of the intervention of HRD mission will be to enhance skills of the operators, to produce technically better products for the consumers and help establish Indian Brands.
It is proposed to train workers and artisans of unorganized sector to enable them to adopt modern tools and techniques, international standards and sizing and hence make them competitive in the domestic as well as in the international market. It will help to integrate unorganized sector with the organized sector in the footwear and Leather industry.
Initiatives for introducing training aimed at integrating the unorganized sector with large export houses by establishing linkages which would promote outsourcing of their requirements are also proposed.
In order to achieve global standard in production and design, foreign training aiming at exposure to best global practices would be undertaken.
2. Mission Objectives
The scheme would leverage on the existing infrastructure, strengths of the various stakeholders such as NGOs, Private Sector and the Government, and stakes of potential employers. In this effort participation of all relevant stakeholders will be encouraged, under various forms of Public Private Partnerships.
The Scheme would cover the full range of training programs to cover the kinds of training courses as described below:
Primary: It would cover the training of the persons not already employed in the sector at entry level in shop-floor operations. The emphasis would be on placement link training where at least 75% of those trained would be placed in the industry and a certificate to that effect obtained
Secondary: It would cover skill up gradation training of those already involved in shop-floor operations in both organized and unorganized sector of the leather industry and would also include on-site training. It would target rural/urban youth irrespective of their educational background.
Foreign /Domestic training of Trainers: In order to create and sustain a technology culture in Indian Leather sector and to enable industry to gain technology competence to enable them to compete in the global market a component of foreign training is included. It would include upgrading the skills of trainers/experts of technical institution/NGOs involved in the project. The idea is to expose those involved in training of workers to the best global practices and thereby disseminate the new technology to the industry in India
5. Pattern of Assistance
Primary (Skill Development) - Rs.50 crores
This segment would essentially focus on Placement linked financial assistance for training youth and placing them into gainful employment in the leather sector. The Ministry will fund 75% of the expenditures incurred, subject to a maximum of Rs.10,000/- for every person trained and placed in the industry. This support is intended to include capital and recurring cost of training; and expenses towards boarding and lodging of candidates. The balance 25% is to be borne by the Implementing Agency (IA) by accessing other non government sources preferably from industry. The Implementing Agency will enter into agreement with the industry in meeting the balance cost of training and would get commitment to absorb at least 75% of the trainees in their factories.
Secondary (skill up gradation) – Rs.6 crores
On-site Training for existing employees in the industry at the shop floor: The targeted beneficiaries are existing employees of the industry to enhance productivity and exposing workers to better manufacturing processes etc. These trainees will be trained on the machines available in the industry; and no new job is created through this training. For such training 50% of the project cost is to be met by counterpart in case of SSI and 25% in case of Non-SSI. Ministry assistance under HRD scheme would be restricted to Rs.2500/- per person.
Training in unorganized sector: This training is aimed at enhancing the skills of the unorganized sector operators towards production of technically better products for the consumers. The intervention is expected to help integrate unorganized sector with the organized sector in the Leather industry. Given its positive socioeconomic benefits, the Ministry will fund up to 50% of the cost, subject to a maximum of Rs.2500/- per person trained.
The effort would be to link them with the large producers/exporters to help them to outsource their work to these trained workers in an un-organized sector. Separate funds under the HRD Mission would be provided to help formulate such linkages.
Foreign/Domestic Training of Trainers – Rs.4 Crores not exceeding Rs.2 Lakh per person
It is proposed that counterpart beneficiary would need to meet at least 50% of the travel and training costs and the living expenditure of trainees abroad. HRD Mission would make provision for 50% of the travel and training cost only. Contribution for HRD Mission funds for this component would be limited to Rs.4 crores and Rs.2 lakh per person. Group of persons trained under this scheme of international training would have to act as trainer for training the workers under HRD Mission.
National Monitoring Committee and the Department after a survey would prepare a panel of foreign and domestic technical institute for undergoing training under this component.
6. Envisaged Activities under HRD Mission
7. Areas of Investments of HRD Mission Funds
8. Implementation Mechanism
(i) Identification of Implementing Agency. Given the enormity of the skill needs and the variety of existing strengths that can be leveraged, the scheme will be flexible to permit a variety of models that are best suited to the scope of the training program to be undertaken by different potential implementing agencies (IA).
Any agency in the private or public sector, with the requisite capacity, performance track record, and adequate systems for accountability and transparency will be eligible to receive assistance from the government, for a well structured project to train and place targeted youth in regular wage employment or train and assist youth in setting up sustainable self employment. Illustratively, these agencies could be private corporate entities, non-government organizations, voluntary organizations, state government agencies, trusts or other entities promoted by the corporate entities, training institutions, etc. With a view to leverage existing strengths and capacities in the system, the IA, in turn, may enter into partnerships with suitable service providers or agencies, for delivery of the program; however the IA alone will be responsible for effective project implementation and administration.
(ii). Identification of trades
Scheme would address the human resource needs of the leather industry; the trades to be included would be those employed in the entire value chain from flaying to finished products, such as flaying, preservation, tanning, finishing, waste treatment, footwear (clicking, closing, lasting, etc.), footwear component, leather garments, leather goods and any other shop floor trade in the leather sector.
(iii). Identification/selection of trainees
The task of identification/selection of trainees will be handled by the Implementing agency with the help of the local administration. Selection process in the programme should be demand driven. Only those who seriously wish to acquire skill and get placement in the leather industry should be considered for selection. The selection process should, therefore, adequately appraise the aptitude profile of the candidates. If required, aptitude test should be conducted for the selection process. While selecting the trainees, preference should be given to those below poverty line.
(iv) Minimum target of trainees
Since the assistance is intended for meeting the cost of training, which would include purchase of machinery, training should be conducted for at least 5 years so that the benefit of such capital expenses can be fully derived towards skill up gradation of large number persons. The IA should undertake to train and place a minimum number of persons, which is linked to its training capacity. For optimal capacity utilization, the smallest training agency would have an annual capacity for training about 500 persons; hence for eligibility of assistance the IA must undertake to train a minimum of 2000 to 2500 persons over the life of the machinery purchased. The minimum number would increase proportionate to the training capacity.
While sanctioning the project, the Department would enter into a MOU with the Implementing Agency and would ensure the guarantee against IA abandoning the project in between.
(v). Training Curriculum
The curriculum of the training would be standardized and would be as per standard acceptable to the industry. The Department would identify an independent institute to grant proficiency certificate to those trained under the scheme.
The Department would appoint an outside agency, i.e., National Monitoring Unit (NMU) for providing technical support, monitoring, concurrent evaluation, etc. The NMU would be selected by the Department from amongst competent organizations, selection of which would be in a fair and competitive manner.
Industry Associations/ technical institutions, NGOs, entrepreneurs who are interested in taking the scheme would submit a project (Proposal Format is at Annexure A).
The proposal would be examined and appraised on the basis of the guidelines of the scheme. Thereafter, the proposal would be submitted for the approval of the Steering Committee. The money would then be released to the concerned implementing agency by the Department.
National Monitoring Unit would be responsible for periodic monitoring and assessment of the training conducted by IAs. NMU would get the impact assessment study done for the training conducted by the implementing agency every year before recommending further projects of the agency. DIPP would also appoint a reputed agency with technical expert in skill development to certify the training conducted by the concerned implementing agency.
9. Key parameters of output linked financial assistance for skill development
Placement Linked: The program is placement linked. Pre-requisite of the program is the commitment of the industry to employ the trained persons.
Training Centers: In selecting and equipping the training centers, the Implementing Agency must leverage and utilize existing infrastructure and facilities. No buildings should be constructed.
Machinery and Equipment: The IA should configure the appropriate equipment needs and provide them in the Training Centers, after assessing the needs of the Industry and the trends observed therein. Since the projects involve substantial capital expenditure, it should be operational for at least 5-7 years so that the benefit of such capital expenses can be fully derived towards skill up gradation of a large number of persons.
Content: IA must develop content with inputs from the industry to meet the global best practices. Since the profile of the targeted persons is unlikely to have experience or orientation to the Industry environment, the content must include both core hard skills and soft skills components. Given the targeted beneficiary, content should be translated into local languages to enable smooth absorption of the skills by the trainees. Use of technology and multimedia that improves delivery of training, will be encouraged.
Duration of Training: The Course duration could be determined depending upon the nature of the trade and should be of at least one month’s duration.
Proficiency Certificates: On completion of the training, the IA shall issue competency certificates to the trainees on the basis of a competency test administered as per standards developed by any independent agency acceptable to the industry or employer. DIPP would decide such an agency at the time of approval of the project.
Placement: The IA would take all steps necessary to partner with the Industry and obtain the commitment of industrial units for employment of at least 75% of the successfully trained candidates. To this intent, the IA must obtain letters of commitment from prospective employers and also involve them in the process of selection of trainees, proficiency assessment and content development.
Post employment tracking: The IA should maintain a database for person trained and placed in employment under the scheme. IA should submit a report on the employment status of those trained and place under the scheme to the Department atleast for two years after initial employment in the industry.
Industry – The objectives of program is to provide skilled manpower to the leather sector, so that they can take advantage of growth opportunity in the economy. Hence the potential employers must demonstrate their stake in this project by offering commitment letters for employment, participating in content development, selection and evaluation of candidates and provision of ongoing inputs to the IA.
State Government – The State Government may provide support in the form of infrastructure such as building, matching financial support, etc. Wherever feasible, State Governments would dovetail their schemes in assisting travel, boarding and lodging needs of the trainees.
Central Government – Central Government would provide financial support for facilitating the conduct of skill development programme, as per provisions of this scheme.
Implementing Agency – The IA would be responsible for the entire process from planning, selection of candidates, content development, training and placement, resource mobilization and subsequent monitoring and evaluation.
National Monitoring Unit – NMU would be responsible for providing technical support, monitoring, evaluation, etc. It would be responsible for maintaining the database of all the trainees and for all the projects. It would monitor the scheme and send the report to the Department periodically.
10. Procedure for Release of Funds
Funds will be released by the Ministry to the Implementing Agency on the basis of enrolment and approved cost. The IAs and NMU will devise suitable systems and procedures to ensure proper utilization of funds. The responsibility for rendering of accounts and audit reports to DIPP shall rest with the IA or the NMU.
Central Government’s share of the approved project cost would be released in installments. Usually the first installment would be released as advance in order to start the project. The balance installments would be released on the basis of the progress of the project, i.e. the training conducted and placement secured for the trainees. The effort of the Government would be to shift slowly to funding on reimbursement basis based on the outcome of the project.
Implementing Agency would submit quarterly progress report in the prescribed format indicating sufficient information to establish the conduct of training and assured placement of the youth.
11. Criteria for screening proposal