Friday, April 20, 2012

CORE plans to invest Rs. 2.25 billion in vocational education

Education company Core Education and Technologies Ltd plans to invest at least Rs. 225 crore (Rs. 2.25 billion) to open a chain of vocational education institutes across India to train some three million people over the next five years. “The company understands the existing skill gap in India and thus the market potential, said Sanjeev Mansotra,” Chairman and Chief Executive Officer of Core Education.

“As an end-to-end solution provider, we would like to focus a lot on vocational education. We will invest some Rs. 225 crore (Rs. 2.25 billion) and expect a revenue between Rs. 550 crore (Rs. 5 billion) and Rs. 600 crore (Rs. 6 billion) by the end of five years from now,” Mansotra said. “India needs an additional 140 million skilled workers across industry segments,” Mansotra added.

Vocational training in India is a $20 billion business opportunity per year, according to a July 2011 report by Kotak Securities Ltd. Around 475 million people will need training by fiscal 2022, it said. Vocational education has also emerged as one of the top priorities for the Indian government as it seeks to meet the skilled manpower requirement of the world’s second-fastest growing major economy.

Prime Minister Manmohan Singh has set a target of training 500 million people by 2022 and the central government has already allocated Rs. 2,500 crore (Rs. 25 billion) to the national skill development fund since 2009-10. Besides, several ministries are also deploying resources for skilling India’s workforce.

Mansotra said Core Education will raise funds from three main sources — internal accruals, public-private tie-ups with government agencies and a possible loan from the National Skill Development Corporation (NSDC). An NSDC spokesperson said that the board is yet to take a final call on Core Education’s proposal. If the company ties up with NSDC it has to assure at least 80% placement.

Core Education may not adopt the franchise model for its educational institutes. It instead plans to set up 150 “company owned centres” across the country. Construction, automobile, healthcare, retail, hospitality, information technology (IT) and IT enabled services will be the key focus areas for the company.

“We will follow the source, train, place model by working closely with industry and government bodies,” Mansotra said. Skill training providers need to focus on quality education, said experts. “Skill is a huge challenge and this needs to be tackled on a mass scale without hampering quality,” said Rituparna Chakraborty, co-founder and vice-president of staffing firm Teamlease Services Pvt. Ltd. “Currently, we struggle to get enough right candidates. Our rejection rate is quite high.”

Source: Mint, April 20, 2012

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