Sharada Prasad committee

  • by IAS Score

Context: The Government of India, Ministry of Skill Development and Entrepreneurship constituted a Review Committee for Rationalization and Optimization of the Functioning of the Sector Skill Councils (SSC). Its objective was to “review the functioning of the Sector Skill Councils so as to ensure rationalization & Optimization of the Functioning of the Sector Skill Councils”.

Key findings made by the committee?

  1. Crony capitalism: The committee has termed these councils a ‘hotbed of crony capitalism’ who are trying to ‘extract maximum benefit from public funds.’
  2. Conflict of interests: It has cited several instances of conflict of interest in the councils’ membership base, including those involving three NSDC board members
  3. NSDF: It also said that the governance of the National Skill Development Fund (NSDF) is flawed.
    1. The NSDF is required to oversee the work of NSDC. But Board of trustees of the NSDF consists of three members, one of which is chairman of NSDC. Now how can the supervisory body consist of head of the supervised body as a member?
    2. NSDF was set up in 2009 to raise funds from both non-government entities and government.

Key recommendations made by the committee?

  1. Centre should scrap the existing 40 skill councils, many of which have overlapping roles. These should be replaced by just 21 councils in accordance with the national industrial classification of different sectors.
  2. Government should review the NSDC’s role and functioning comprehensively.
  3. Government should also introduce an oversight mechanism on the NSDC to ensure that such conflicts of interest do not arise in future. This mechanism should be preferably from the central bank, as it is registered as a non-banking finance company.
  4. The Chairman of NSDC should be excluded from NSDF.