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3. Quantify and monitor the impact of vocational education:
Data should be
collected periodically and analyzed in order to assess the impact of training on
employability. Empirical evidence on wage premium or other advantages enjoyed
by VET graduates; seat utilisation in training institutes; nature of employment
post-training; efficacy of various schemes, etc. is essential for continuous
improvement. A detailed exercise of manpower analysis is a necessary step to
understand the nature and quantum of demand for VET and the mismatch
between the skills of VET certificate holders and the requirements of the labour
market. This exercise may be undertaken by the proposed National Institute of
Vocational Education Planning.
4. Increase resource allocation to vocational education: In per capita terms
vocational education is costlier than general education, however public
expenditure on vocational education has been extremely low, as compared to
general secondary education. Given the demand for skilled manpower in
manufacturing and services the Government should aim to spend at least 10 -
15% of its total public expenditure on education, on vocational education.
Some options that may be considered for raising additional funds to finance a
modernised VET scheme are:
i. Enhancing fees, coupled with student loan schemes. This would also make
VET institutions more responsive to market needs.
ii. Raising funds through a cess on employers (for instance 2% of salaries of
all employees, as in Singapore).
iii. Making it obligatory for companies to finance public vocational education
and training programmes (as in Korea).
5. Expand capacity through innovative delivery models: In order to meet the
burgeoning requirements of skilled and unskilled labour, a massive increase in
quantity of training is needed. The Government may explore new delivery models
to increase capacity such as public private partnerships, decentralized delivery,
distance learning and computerized vocational training. A brief outline for these
delivery models is at Annexure 2. A more detailed proposal on the use of ICT in
VET is at Annexure 3. At the same time, the Government must introduce certain
minimum standards as a measure of quality and ensure that these are adhered to
by all public and private VET institutions.
6. Enhance the training options available for the unorganized and informal
sector: The greatest challenge lies in providing training for potential entrants in
the unorganized/ informal sector, which accounts for the largest proportion of
employment. Systematic efforts need to be made to impart the skills required by
the unorganized sector. These should be formally introduced in the curriculae and
practical training courses. In order to achieve this, the government should act as a
facilitator and provide financial support for the models described in Annexure 2.
This aspect of VET is critical for the success of the system as a whole.
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