An estimated 12.8 million Indians enter the job market each year, but there are only 2.5 million vocational training seats in the country—a serious problem for a country endowed with the demographic gift of a large young working population. Only about 5 per cent of the Indian workforce between ages 20 and 24 have formally obtained vocational skills, the same ratio in developed countries is 60 to 96 per cent.

Realising that developing skills for youth with minimal formal education can no longer be ignored, Finance Minister P Chidambaram had proposed a public-private partnership between Government and industry for taking up a skills development programme in his February 2005 Budget Speech. After months of consultations with state governments, industry and micro-enterprises in the unorganised sector, a new framework for developing the skills of school dropouts and existing unorganised sector workers has been worked out.

A path-breaking feature of the new initiative is the establishment of a direct link between performance and pay of both the trainers and the trainees. While trainees would pay Rs 1,000-2,000 for short-term training modules that involve 10 to 500 hours of training, the fees will be refunded on successful completion of the training. Similarly, the trainers' remuneration will depend on the number of trainees successfully completing the modules, thus aligning the trainers' interests with the trainees.

Moreover, there won't be any rigid schedules to the training, one could opt between part-time, weekend, onsite or offsite training.