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May 17, 2009




Page: 3/35

Home > 2009 Issues > May 17, 2009

UPA style trickles down to it is

Can a donkey and a horse together pull a cart faster and over a longer distance?

The provocation for this issue is the UPA government?s grandiose scheme of super-imposing private sector management on State-run Industrial Training Institutes (ITIs) under the public private partnerships (PPPs).

The issue has, however, been couched in polite words in the official document as: ?There is different work culture in Govt. and industry. The dual control of the State Govt. and the industry partner over the ITI staff may be a hurdle in achieving the desired result.?

In a letter, dated April 8, 2009, the Centre has thus clarified to the States: ?The IMC (Institute Management Committee) is an autonomous body which is fully empowered to take its own decisions for development of ITI. The State Govt. is requested not to interfere with its functioning but to make an enabling environment for effective and successful implementation of the scheme to make ITI self-sustaining.?

Under this PPP scheme, the Centre would dole out interest-free 30-year-long loan aggregating Rs 3490 crore at a rate of Rs 2.5 crore, ITI to statutory authorities called Institute Management Committees (IMCs) that would be registered under the Societies Registration Act. The government has earmarked Rs 175 crore for management, monitoring and evaluation of the scheme.

With this Rs 3665 crore total expenditure, the government aims to upgrade 1396 out of 1896 ITIs into ?centres of excellence?.

IMCs would act as de facto separate entities with their own account books and retain control over the assets that they would buy with government loans and other funds that might perhaps flow in the private sector. Each IMC would also have a separate bank account as well as Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

Each IMC is empowered to determine up to 20 per cent of the admissions in the respective institute.

According to an analyst, this dual management structure for ITIs is completely avoidable. The government can easily save Rs 175 crore on scheme management and monitoring and utilise that money for setting up more institutes.

The scheme also reflects the Centre?s distrust in devolution of funds directly to ITIs or indirectly to the States. If the government has no hesitation in giving grants to other PPP projects, why can?t it give grants to the institutes instead of interest-free loans through the cumbersome route of IMCs?

The government could have involved private sector in upgrading the institutes simply by nominating their representatives in their governing councils.

The dual management structure for ITIs is akin to dual control of UPA government?PM and UPA chairperson.




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