1. 5 September 2013
Manthan
Boosting Skillsets: Increasing the employability of youth
Proposed Solution: Employability Enhancement Bonds and
KarmaNet (National OnlineTrainee Exchange)
•The Excelators
•Abbas Sura
•Anindita Das
•Bhuwan Mahajan
•Gaurav Mahajan
•Sanchari Samui
•(Indian School of Business)

2. Government is focusing on various measures to reduce unemployment through introducing innovative ways. Various schemes and
plans have been set up by Government over years but such schemes and plans have not been able to reap intended results and India
is still struggling with the high employment rate of over 6 %^
•^ Employment annual report 2012
• National Skill development Coordination board was set
up in 2013
• Multiple organizations and committees in place to curb
the problem
• Annual Target for various ministries/organizations for
2012-13 is 7.28 Mn and till June’13 the actual
achievement is 0.76 Mn (~10%)
Lack of skilled
population
• Significant mismatch between demand and supply of
the skills across industries and regions
• India reported a 48% job fulfillment challenges due to
lack of employable sources in 2012 higher than the
global standard of 34%
Demand Supply
mismatch for
employable
skills
• Corporates are not actively involved in designing
trainings for the youth
• lack of check on the quality of training imparted
• At the grass root level in the economy there is lack of
awareness about the skills required to become
employable
Low Corporate
Involvement in
government
initiatives
UNEMPLOYMENT
Problem of Employability and Skill-Development
Overview
Current Needs
• Innovative skill
development
measures need to be
adopted
• Reach to the grass
root level of the
population is required
• High involvement of
the corporates to
bring efficiency and
success of the adopted
measure

3.  Outcome-based Payment: The proposed solution
invests tax-payer money in only effective programs
based on whether they achieve the desired outcomes
 Upfront Raising of Finance: Frees government funds
which could have been otherwise locked as government
pays only when the program is successfully executed
 Innovative substitute for grants and loans: EEB
would tend to increase accountability of private players
towards the government and trainees
 Flexibility to Training Providers: EEB concept
provides them the flexibility to raise funds based on their
needs and thereby, providing room for innovation
 Online platform to bridge skill demand-supply gap:
KarmaNet will allow an effective platform for trainees
and industry to engage
 Government , in collaboration with NSDC, to establish
an independent body - Employability Enhancement
Bond Committee (EEBC)
 An online database of unemployable youth to be built to
assist in selecting trainees for each program
 EEBC to issue bonds to investors for raising capital for
the skill-development programs
o Training programs to be based on gaps in skill
demand and supply
 An independent evaluator to determine and assess
the outcomes, basis which government will make
payments to investors and service providers
 EEBs will be an instrument that will allow government to raise capital from private investors through an independent committee
for running skill-development programs run by independent third-parties (e.g., NGOs and social entrepreneurs)
o Trainees for each program to be selected through an online trainees database – KarmaNet – to be setup by National Skill
Development Corporation (NSDC)
 Investor returns and third-party service providers’ payments will be based on the outcome of training programs
 Thus, EEBs have the potential to ensure utilization of taxpayer-funds for only effective training programs while at the same time
mobilizing enough funds upfront to launch skill-development initiatives at a huge scale
Proposed Solution: Employability Enhancement Bond (EEB) and KarmaNet
Proposed Solution
Employability Enhancement Bonds and KarmaNet
Implementation Model Innovation

4. IndependentEvaluationand
MonitoringAgency
Employability
Enhancement Bond
Committee
(EEBC)
GovernmentPrivate Investors
Training Providers
Employable and
Underprivileged Youth
• Selected from the national training
register, ‘KarmaNet’, based on their
existing skills
• Will include pool of unemployable
graduates
Performance –based
Disbursement of Funds
ROI based on
Performance
Investment in Selected
Training Program
Operating Capital
Training-program customized
to Industry demand
•1
•2
•4
•5
•6
Evaluation of Outcomes
National Skill
Development
Corporation (NSDC)
Parent Body of EEBC
Representing social impact investors, private
companies, and development agencies
Includes social entrepreneurs and
NGOs having past track record in the
field
•3
Proposed Solution
Solution Design

5. Proposed Solution
Key Advantages
• Opportunity to achieve financial and social
returns through single investment vehicle
• Opportunity to invest in transparent social
programs that also actively engage them
• Promotion of training programs meeting their
specific needs
• Increased pool of skilled labor trained
according to their standards and requirements
• Enhanced government and consumer
credibility
• Investment of government funds in only
effective training programs
• Improvement in prevalent training
infrastructure
• Development of credible database of potential
trainees to gauge skill demand and supply
• Effective mapping of market demand with
aptly skilled labor supply, thereby reduction in
unemployment
• Impartment of effective training in in-demand
skill sets
• Assured absorption in organized mainstream
• Increased probability of finding suitable
employment within vicinity of inhabitance
• Certification providing credibility, thereby
assisting in securing better job opportunities
• Reduced burden of job placement as training
program directly mapped (through KarmaNet) to
skill demanded by industry
• Easier access to flexible funding
• Assistance in training program development
through engagement of industry
• Access to repeat opportunities if program
executed efficiently
• Returns based on transparent evaluation
system
Advantages of
Proposed
Solution

6. Implementation of the Solution
Implementation Strategy
Implementation Process: An Overview
Establishment of
Employability
Enhancement Bond
Committee
 NSDC will establish the
independent
Employability
Enhancement Bond
Committee (EEBC)
 EEBC to be responsible for
implementation and
monitoring of the program
 It will have representation
from the government,
private players, and NGOs
on its boards
 NSDC will build the
KarmaNet
 All unemployable youth in
age group 18-35 years can
be part of KarmaNet
 KarmaNet to enable
mapping of training
needs with potential
skills of registered youth
 Youth enrolled in a training
program to provide a
refundable security (say
INR3,000)
ImplementationProcessStakeholders
 EEBC will identify gaps in
availability of skilled labor
 Then identify service
provider through tender
process
o Tender process to give
high weight to past record
 Post selection of service
provider, raise required
capital by issuing bonds
to investors
 Then disburse only the
operating capital to the
service provider
 EEBC will select an
independent evaluator
that will:
o Formulate the contract
o Assess desired outcomes
 Evaluator to establish the
threshold outcome-level
and ROI-based on
outcomes above threshold
 Then, provide report to
the government for the
contract period basis which
payment to be released
 Government
 NSDC
 EEBC
 NSDC
 EEBC
 Youth
 EEBC
 Social Entrepreneurs
 NGOs
 Social impact investors
 Private companies
 EEBC
 Government
 Independent evaluation
agency
Development of
‘KarmaNet’ and
Mapping of Training
Needs
Identification of
Training Providers
and Issuance of EEBs
Independent
Evaluation of
Outcomes

7. Implementation Strategy
Development of KarmaNet
Supply Side
 Unemployable youth in the age bracket of 18-35
years will be able to register on the online
database by creating a user account
o The database would target both educated
and uneducated audience
 To create awareness about the database,
dedicated camps would be organized across the
nation
o Computer illiterate youth will be able to
register on the database through these
camps, supervised by NSDC representatives
 Registration process would be fairly easy and
require basic demographic and skill-related data
 Further, it would be adept in vernaculars of the
concerned region and contain images
• KarmaNet will be an online platform that will allow employable youth and the industry to engage thereby helping in reducing the
critical gap between skill demand and supply
• The online database will be owned and managed by the National Skill Development Corporation and will be similar to National
Employment Exchange database
Demand Side
 Employers would be able to register their specific
job and skill-set requirements on this database
o Including period when skilled-labor required,
potential remuneration offered, and the region
of placement
 Gauging the demand for the skills, EEBC will
float EoI and tenders for relevant training
programs in the specific region
 The database will allow the service providers to
submit their EoIs and tenders through the
database itself
o The tender will be evaluated based on the –
past experience in the particular skill-set
training, experience in the region,
infrastructure, efficacy of course module,
and the bid amount

8. Selection of Independent
Evaluation Agency
• Independent evaluation agency will be selected through an RFP process
• The selection will be based on the following criteria:
o Experience in the training program and contract formulation
o Credibility of the institute
o Price quoted in the RFP
Development of
Evaluation Metric for
Desired Outcome
• The evaluation agency will be responsible for determining the desired outcome levels for each
training program monitored by it
• It will be do so in-consultation with EEBC, investors, and training providers
• The agency will develop a scoring metric based on:
o Social excellence parameters: % trainees placed, presence of quality manuals, etc.
o Financial excellence parameters: E.g., total capital utilized, etc.
o Success of the program will be evaluated based on this scoring metric
• The evaluation will be done over a long-term horizon (e.g., at lease a period of 2-3 years)
Determination of ROI
based on Evaluation
Metric
• The evaluation agency will determine a threshold score below which the program will be deemed
unsuccessful
o Investors and service provider will not be offered any payment in such a case
• Further, the agency will set discrete outcome-levels above the threshold based on which the
return will vary
o E.g., for a score of 80, the investor will be given a return of 8%, while for score of 85 a return of
12% will be offered
Implementation Strategy
Evaluation Criteria and RoI Determination

9. NSDC
EECB Board
Independent
Director
(Nominated)
NSDC
Representative
Corporate
Representative
Chairman-EECB
EECB Team
Corporate
Relation Team
Recruitment
Team
Marketing/
Media Team
Finance Team IT Team
Evaluation
Team
Stakeholders
Investors
(Corporate and
others)
NGOs and
Other
Institutes
Potential
Workforce
(Society)
Implementation Strategy
EEBC Organization Structure

10. Impact of the Solution
Impact across Stakeholders and Society
•Greater involvement of
Corporate
•Increase in Number of
Vocational Skills Institutes
•Poverty Reduction •Balanced Regional
Growth
•Demand Supply
Matching
•More Employment
Generation
•Economic Growth
EECB
•Funds
Skill Requirement
•1000+ new corporate joining the
cause each year for next 9 years
(Pan India)
•1000+ new institutes join the
initiative each year to teach
vocational skills
•Each new player imparting
vocational skills to 1000+ new
persons across India
•1 million+ additional trained people
across India per year
•81 million + additional trained
people across India by 2022 with
ready market to for employment
•Reduction in Unemployment by 81
million+ people and reduction in
regional employment imbalance

11. Risks Involved Mitigation Measures
Low Awareness
Failure to create awareness about
KarmaNet among masses
Launching dedicated promotion through
national TV, social media, and in-
person physical camps
Reputation Loss
Consistent under-achievement by
institutions to attain expected results,
leading to loss of reputation, credibility,
and trust
Proper due-diligence prior to finalizing a
contract with an institution
Economic Condition of
Market
Dampened market conditions leading to
potential investment-aversion sentiment
Bond committee to ensure market return
by measures such as adjustment of
interest rates, provision of tax exemption
as incentives, etc.
Investor Interference
Interference by investors due to their
vested interests in the training-
impartment processes
Regulations to be incorporated to
regulate the level of interference in the
process by corporates
Sustaining Focus
Without additional resources, maintaining
focus on the EEB structure may become
a challenge in the long-run
Dedicated personnel should be
employed to create awareness about
advantages of EEB
Risk and Mitigation Strategy
An Overview

12. References
 Social-Impact Bonds : Social Finance.ca, org, frbsf.org
 Data on Employability, target of employability : IMaCS Aon Hewitt and NSDC,
aspiringminds.in, indiancag.org
 Data on Skills Management – FICCI_skill_Report_2012
 Data on investors, for-service-providers : instiglio.org
 Employment report : dget.gov.in
 Labor related data : labourbureau.gov.in, labour.nic.in
Appendix