Skill Impact Bond [UPSC Notes]

The Skill Impact Bond initiative has skilled nearly 18,000 first-time job seekers, 72% of whom are women. In this article, you can read more about the Skill Impact Bond, its advantages and how it works, for the IAS exam.

What is the Skill Impact Bond?

It is an innovative outcomes-based financing tool that leverages private sector capital and expertise; the Skill Impact Bond shifts its focus from inputs like training and certification to outcomes like job placement and retention for India’s youth.

• The Skill Impact Bond is India’s first development impact bond for skilling and employment, with the goal of benefitting 50,000 young Indians over four years, 60% of whom would be women.
• The Skill Impact Bond is an initiative pioneered by the National Skill Development Corporation (NSDC) in India. 
• The collaboration also aims at strengthening the capacity of India’s technical and vocational education ecosystem through knowledge exchange, evidence and data generation and mainstreaming good practices.

Modus operandi of Skill Impact bond

Source: NSDC                                                    

• Its primary objective is to revolutionise the implementation of skill training programmes, specifically targeting the need to bridge the gap between skilling and employment, particularly for women. 
• It aims to foster an outcomes-driven strategy that prioritises job placement and retention over the course of four years.
• The coalition harnesses the expertise of a diverse group of funders and partners who possess extensive knowledge in innovative finance, skilling, gender equality, monitoring and evaluation, and data-driven decision-making.

Also read: Skill India Mission

Skill Impact Bond Advantages

• The initiative aims to generate long-term employment opportunities and improve the overall health and well-being of skilled individuals.
• It will bring together various philanthropic agencies, skilling partners, risk investors, and capital providers to promote capacity building of India’s skilling and Technical and Vocational Education and Training (TVET) ecosystem.
• Upgrade skills to international standards through significant industry involvement and develop necessary frameworks for standards, curriculum and quality assurance.
• Play the role of a ‘market-maker’ by bringing funds, particularly in sectors where market mechanisms are ineffective or missing.
• It contributes significantly to the overall target of skilling up people in India, mainly by fostering private sector initiatives in skill development programmes and providing funding. 

Skill Impact Bond:- Download PDF Here