Vocational Training using Mobile Units

Observation:

The vocational training is predominantly the responsibility of the Government. However, the growth in training facilities is far behind the actual requirement and this has resulted in huge shortage of trained, certified artisans. This is primarily because of a mismatch between the vocational training needs and training facilities. The training facilities are mainly located in cities and big towns whereas the requirement is at the ‘Kasba’ or ‘Moufissil’ town levels or even at village level.

Suggestion:

Individually, the requirement of training artisans at these places is small and the training requirement gets saturated in a short period. Creation of fixed training facilities will be costly and will not be fully utilized. To meet this special requirement it is important that a flexible approach in delivery of training is adopted using “Mobile Training Units”.

This will facilitate imparting of vocational training to a very large number of artisans who are not able to join mainstream education through Industrial Training Institutes. There is a huge untapped market which is available for training and certification of artisans. There is also space for large number of players in this market because of the special demographic condition in India and South East Asia.

The outcome can be measured by the unemployment rate of the area where the project has been launched after a few months of providing the vocational training to artisans along with the increase in the average earnings of these men after training.

The “Mobile Vocational Training Unit” model is proposed to be implemented in Uttar Pradesh and Bihar in India, which has a large youth population, and severe shortage of training / higher education facilities. This can subsequently be replicated in other states of India/Countries after necessary fine-tuning.

Business Model:

• Engage retired railway and defense personnel who are master craftsman as Instructors and provide them with “Mobile Training Units” on partnership basis.
• The training software and hardware to be centrally procured and disbursed.
• The training curriculum to be kept uniform with large component of multimedia modules.
• Get Government registration for Certification.
• Local personnel to be given preference for such assignments as they are familiar with the geography of the region.

The above model will keep the cost of operation minimum.

Infrastructure: Mobile training vans (e.g. Eicher LCVs converted to accommodate two related trades.)

Partnerships: With local Primary/Secondary schools, Panchayats.

Customers: Youth in the age group of 16-30 years.

Revenue model: Fees from the students (artisans), government aid, certification fees and sponsorship from Corporate.

Cost of Capital: (Assumptions)

• Capital cost of one “Mobile training unit” will be approximately Rs. 6 lakhs.
• Depreciated over 5 years : Rs. 6 lakhs/5 = Rs. 1.2 Lakhs per annum
• Interest burden @ 10% p.a. = Rs. 0.6 Lakhs per annum
• Total cost : Rs. 1.8 Lakhs per annum

Cost of Operation: (Assumptions)

• Cost of instructor: Rs. 10,000 per month
• Cost of helper : Rs. 4000 per month
• Running cost of unit: Rs 10,000 per month
• Total : Rs 24,000 per month
• Overhead: 50% of the above = 0.5 * Rs. 24,000 = Rs. 12,000
• Total cost of Operation per MU p.a.= (Rs. 24000+Rs 12000) * 12 = Rs 36000*12 = Rs 4,32,000

Revenue generated: (Assumption)

• Training per unit per day in hours = 8 hours
• No of days per month = 25 days
• Batch Size = 15
• Total no. of trainee hours per unit = 25*8*15 = 3000 trainee hours per unit per month
• Fees per trainee hour = Rs. 20
• Total fees per unit per month = 3000 * 20 = Rs. 60000
• Total Revenue per annum = 12 * 60000 = Rs. 7,20,000

SURPLUS = Revenue – (Cost of Capital + Cost of Operation)

= Rs. 7,20,000 – (1,80,000 + 4,32,000) = 7,20,000 – 6,12,000 = 1,08,000 per MU/p.a

Risks:

• Change in government policy
• Delays in payment by government agencies

The project will be viable with 10 Mobile Units with an investment of approximately Rs. 60 Lakhs.