2016

FUNDING GUIDELINES

[NSDC FUNDING GUIDELINES]

This document contains guidelines for submission and evaluation of business proposals for financial assistance from
NSDC, effective from March 29th, 2016.
NSDC reserves the right to review, amend and alter this guideline document any time at its sole discretion.

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I.

Disclaimer

a) The various clauses/sub-clauses of this document have been incorporated based on approval given by the
Board of NSDC. The authority to change/ modify/ remove/ add any clause/ sub-clause of this document
lies with the Board of NSDC.
b) The various clauses/sub-clauses of this document will be adhered to in letter and spirit. Any proposed
deviation/exception related to any clause/sub- clause of funding guidelines pertaining to any proposal
submitted to NSDC shall have to be approved by NSDC Board, on a case to case basis.

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II.

Introduction
National Skill Development Corporation (NSDC), a Section 25 Company under Companies Act, 1956
(corresponding to Section 8 of the Companies Act, 2013), was initially set up under the Prime Ministers
National Council on Skill Development with the primary mandate of enhancing and supporting Private
Sector initiatives for Skill Development in India.
At present, NSDC functions under the aegis of the Ministry of Skill Development & Entrepreneurship
(MSDE). In order to fulfill its objectives, NSDC solicits and funds proposals that have sustainable
business models. Proposals need to be submitted in prescribed formats and will be evaluated under
the tenets of the guidelines set out under the Financial Management & Procurement Manual.
The proposals submitted should be robust with scalable and sustainable business models catering to
sectors with unmet needs. Ideally, the business models should be serving high growth sectors,
unorganized sectors or training to develop the skill ecosystem. Proposals must be outcome oriented and
should focus on employability through placement in industry and/or self-employment
opportunities.
This document contains guidelines under which proposals for different training / skilling categories should
be submitted.

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Funding Guidelines- NSDC (2016)

III.

Funding Guidelines for Skilling Proposals

The Funding Guidelines are aligned to the philosophy that the business plans and viabilities thereof will be
different for for-profit entity and not-for-profit entity. Hence, the guidelines given in the following section
are detailed separately for the for profit and not for profit entities.
NSDC assistance (Equity/ Grant/ Loan) shall be sanctioned to any form of legal entity including but not limited
to Company/ Society / Trust as per the process and applicable laws and guidelines. Such legal entity shall
have a positive net-worth. In case of a newly incorporated entity, the positive net-worth and the financial
viability for implementation of the project aimed at Skill Development shall be duly evaluated by the Due
Diligence partners and committees and shall be considered by the Board of NSDC on a case to case basis. In
case of Non-for-Profit entity for which the positive net-worth may not be possible, the same shall be
evaluated by the Due Diligence partners and committees and shall be considered by the Board of NSDC on a
case to case basis.

The Project cost/ investment requirement for the purpose of this section shall mean the total funds required
for implementing the Project in the initial three years.

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Funding Guidelines- NSDC (2016)

IV.

Funding Guidelines for setting and scaling up of Training Institutes,

Sl. No

Parameter

1.

Proposal
submission

2.

No. of
persons trained

3.

NSDC Funding

4.

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Guideline for for-profit

Guideline for not-for-profit Entity
Entity
The proposal shall be submitted as per the As for For profit Entity
template(s) provided/ uploaded on the
NSDC website. The project shall be for a
period of seven (7) years (exceptions in
tenure may be considered at the sole
discretion of the Board of NSDC) clearly
detailing out a sustainable and viable
business proposal.
The proposal shall be evaluated as per the
process set out in the Financial
Management & Procurement Manual.
The proposal from erstwhile employee(s)
of a previously approved NSDC project/
organization will be considered after a
minimum of 2 years from the date of such
employee(s) being relieved from that
previous project/ organization.
Minimum 20,000 people during the project As for For profit Entity
phase.

NSDC will provide funding assistance for

creation of skills infrastructure and / or
working capital requirement for skill
development activity for the first three
years only. NSDC assistance shall not be
provided for creation of immovable
property such as land & building etc.
In case financial assistance for loss funding
is required for the first three years of the
Project, the same may be considered as a
part of total investment requirement for
implementation of the Project. In case the
loss funding requirement for the Project is
greater than the Promoter Contribution in
the initial 3 years, Promoter may be
required to infuse additional funds.
Extent of NSDC Funding would be up to a maximum of 75%
Funding
of the investment requirement (subject to
conditions stipulated in Sl.No 3 above).

As for For profit Entity

Funding would be up to a maximum of

85% of the investment requirement
(subject to conditions stipulated in Sl.No
3 above).
.

Funding Guidelines- NSDC (2016)

Sl. No
5.

Parameter
Promoter
Contribution

Guideline for for-profit

Entity
Promoter Contribution shall be to the tune
of minimum 25% of the investment
requirement.
Promoter Contribution shall be through
fresh infusion in the form of share capital/
cash/ interest free subordinated loan from
promoters or contribution in the form of
non-government grant specific to the
project.
The amount of Promoters Contribution
should be clearly reflected as part of
project financials.

Nature/ Mode
of Funding

If the Promoter Contribution comes in

through unsecured loans or interest free
advance, it must remain invested in the
Project till the Secured Obligations are paid
off and upon achievement of milestones to
the satisfaction of NSDC.
NSDC may provide funding in the form of
loan,
equity,
preference
shares,
debentures and grant. However, NSDC will
prefer to provide funding in form of loan.

Guideline for not-for-profit Entity

Promoter Contribution shall be to the
tune of minimum 15% of the investment
requirement.
Promoter Contribution may be in the
form of cash and or contribution in the
form of non-government grants specific
to the project.
The amount of promoters contribution
should be clearly reflected as part of
project financials.
If the Promoter Contribution comes in
through unsecured loans or interest free
advance, it must remain invested in the
project till the Secured Obligations are
paid off and upon achievement of
milestones to the satisfaction of NSDC.

NSDC may provide funding in the form of

loan and grant.However, NSDC will
prefer to provide funding in form of
loan.

The proposal shall be examined by NSDC as The proposal shall be examined by NSDC
per the process laid out in the Financial as per the process laid out in the
Management & Procurement Manual.
Financial Management & Procurement
Manual.
NSDC may invest in the equity of the
project implementing company based on Grant funding is an exception and may
some of the following investment criteria: be considered only in select cases.
a) Talented management team with
a proven track record of creating The limit for grant will be 10% of the
stable processes and profitable project cost. Grant will be restricted to
business;
proposals where sustainability is an
b) Products and services with a
issue and paid model is not feasible or
sustainable
competitive
proposal addressing underserved areas
advantage in target market;
/ underserved sectors, as a part of the
c) Capability of creating high value
proposal.
through innovation through
content, product development
The PEC, PAC may recommend a lower
and process improvement
rate of interest instead of a grant, after
d) Clear strategy for /exit;
examining the business model and
projected cash flows.
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Funding Guidelines- NSDC (2016)

Sl. No

Parameter

Guideline for for-profit

Entity
e) The skilling initiative creates
social impact in underserved
areas / underserved sectors.
NSDC will invest in the equity of the
project company only if it is involved
exclusively in providing skill development
as per the mandate by Central
Government.
In case NSDC takes equity in an entity,
then NSDC will reserve the right to
participate in management which
includes veto power in major decisions
and reserve matters.
Please also refer to the Investment
Management Agreement available at
NSDC website for all other matters like
reserve matters, exit clauses etc.
Following points needs to be noted in
case of equity investment:
a) Investment from NSDC in equity
shall be valued at par.
b) NSDCs equity stake shall be a
maximum of 19% (may be higher
subject to approval of the NSDC
Board)
c) NSDC retains the right of first offer
to sell in case the proposing entity
/ promoter decides to sell his (her)
stake to another investor.
For clarity, profitable/ for-profit projects
where the proposing entity does not have
a clear path for exit, NSDC may not take
investment option in such project in the
form of equity.
Grant funding is an exception and may be
considered only in select cases. The limit
for grant will be 10% of project cost. Grant
will be restricted to proposals where
sustainability is an issue and paid model is
not feasible or if addressing underserved
areas / underserved sectors, as a part of
the proposal.

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Guideline for not-for-profit Entity

It may be noted that NSDC funding

model may have a mix of Grant and
Loan subject to the total NSDC funding
not exceeding 85% of the total
investment requirement.
NSDCs investment in the form of
equity in a not for profit entity shall
always be subject to prior approval of
the Board.

Funding Guidelines- NSDC (2016)

Sl. No

Parameter

Guideline for for-profit

Entity

Guideline for not-for-profit Entity

It may be noted that NSDC funding model

may have a mix of grant (upto 10%), equity
(upto 19%; may be higher subject to NSDC
Board approval) and rest as loan subject to
NSDC funding not exceeding 75% of the
total investment requirement.

6.

Moratorium
Period

Principal Moratorium shall be for a period As for For profit Entity

of three (3) years, No moratorium shall be
granted on interest.
If the principal moratorium period extends
beyond three (3) years, the PEC must
examine the need for the same and if
recommended to the PAC, it must cite the
reasons for doing so. Such exceptions can
include;
1. Projects requiring a higher Capital
Investment due to the nature of sector
proposed to be skilled e.g.
Manufacturing, Engineering etc.
2. Projects related to setting up of
physical centers with substantial
investment in capital expenditure for
underserved areas / underserved
sectors.

8.

Debt Funding
Tenure and
Rates

Debt should be repaid within 7 years or

earlier (including moratorium period, if
any).
This is applicable to all entities. Any
exceptions subject to the sole discretion of
the NSDC Board.
Interest Rate is 6% per annum (simple
interest) for proposals other than,
underserved areas / underserved sectors.
In case of underserved areas / underserved
sectors, applicable rate of interest will
be 6% p.a. However, NSDC may extend a
rebate of 3% p.a. provided all the following
conditions are fulfilled:
1. The
operational
centers
in
underserved areas / underserved

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Debt should be repaid within 7 years or

earlier (including moratorium period, if
any).
This is applicable to all entities. Any
exceptions subject to the sole discretion
of the NSDC Board.
Interest Rate is 6% per annum (simple
interest) for proposals other than,
underserved areas / underserved
sectors.
In case of underserved areas /
underserved sectors, applicable rate of
interest will be 6% p.a. However, NSDC
may extend a rebate of 3% p.a, provided
all the following conditions are fulfilled:
1. The operational centers in
underserved areas / underserved

Funding Guidelines- NSDC (2016)

Sl. No

9.

Parameter

Underserved
Areas / Sector

Guideline for for-profit

Entity
sectors are setup within the first year
of the project.
2. Achievement of minimum 50% of the
project milestones from underserved
areas / underserved sectors.
3. Fulfillment of obligations, terms and
conditions in the agreement(s)
executed with NSDC.
Any pre-payment of NSDC financial
assistance in part or in totality from its
approved tenure shall be subject to
approval of NSDC Board and in such a case
pre-payment charges and other conditions
may apply.

Guideline for not-for-profit Entity

sectors are setup within the first

year of the project.
2. Achievement of minimum 50% of
the project milestones from
underserved areas / underserved
sectors.
3. Fulfillment of obligations, terms
and conditions in the agreement(s)
executed with NSDC.
Any pre-payment of NSDC financial
assistance in part or in totality from its
approved tenure shall be subject to
approval of NSDC Board and in such a
case pre-payment charges and other
conditions may apply.
Underserved Areas: North Eastern States, Jammu and Kashmir, Himachal Pradesh,
Uttarakhand, Andaman & Nicobar Islands, Lakshadweep, and districts affected by Left
Wing Extremism as identified by the Ministry of Home Affairs for the Integrated Action
Plan.
Districts where no Government Industrial Training Institute (ITI) exists (as on the date
of submission of proposal) will also qualify as underserved areas.
The list for Underserved Sectors will be updated periodically and can be obtained
from NSDC.

10.

Representation
on the Board

Where NSDC funding is in the form of Debt,

NSDC reserves the right to appoint its
nominee director(s) on the Board of
borrowing entity.

NSDC reserves the right to appoint its

nominee director(s) / on the Board of
borrowing entity. However, NSDC
Director shall hold a non-executive
position.

Where NSDC funding is in the form of

equity:
o < 10% stake, NSDC reserves the
right to appoint at least its 1
nominee director on the Board of
Directors of borrowing entity.
o > 10% stake, NSDC reserves the
right to appoint at least its 2
directors on the Board of Directors
of borrowing entity.

11.
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Mandatory
Collateral

However, NSDC Director(s) shall hold a

non-executive position.
1. First charge on assets of the
project.

1. First charge on assets of the

project.

Funding Guidelines- NSDC (2016)

Sl. No

Parameter

Guideline for for-profit

Entity
2. First charge on cash flows of the
project.
3. First charge on the Intellectual
Property developed under the
project (e g- Content, Innovation
technology
etc.).
Intellectual
Property of the project (e.g.,
Content, Innovation technology
etc.) will vest with NSDC in case of
default in payment of the agreed
Secured Obligations. Proposing
entity must apply for copyright at
the earliest.
4. Pledge of shares to the tune of
minimum 51% of the equity of the
project implementing entity.
5. Personal Guarantee/ Corporate
Guarantee/
Put-Option
on
another Associate Company (as
defined under the Companies Act,
2013).
6. Post Dated Cheques
7. Hard collateral which can include
but not limited to a bank
guarantee, Equitable mortgage of
immovable property, lien on fixed
deposits etc. covering minimum
30% of the loan amount.

Guideline for not-for-profit Entity

2. First charge on cash flows of the
project.
3. First charge on the Intellectual
Property developed under the
project
(e.g.
Content,
Innovation technology etc.)
Intellectual Property of the
project
(e.g.,
Content,
Innovation technology etc.) will
vest in NSDC in case of default
in payment of agreed Secured
Obligations. Proposing entity
must apply for copyright at the
earliest
4. Pledge letters to be taken
5. Personal Guarantee/ Corporate
Guarantee/ Put-Option on
another Associate Company (as
defined under the Companies
Act, 2013).
6. Post Dated Cheques.
7. Hard collateral which can
include but not limited to a
bank guarantee, equitable
mortgage
of
immovable
property, lien on fixed deposits
etc. covering minimum 30% of
the loan amount.

In case a proposing entity is offering a

higher percentage of hard collateral in the
form of bank guarantee / lien on FD etc.
then the personal guarantee / corporate
guarantee / put option may be waived off
subject to approval of NSDC Board.

In case a proposing entity is offering a

higher percentage of hard collateral in
the form of Bank guarantee/ lien on FD
etc. then personal guarantee/ corporate
guarantee / put option may be waived
off subject to approval of NSDC Board.

Based on the evaluation of the proposal

NSDC may ask for additional security over
and above 30% in the form of hard
collateral for proposals entailing higher
risk. The collateral, so specified, will rest
with NSDC till the Secured Obligations are
paid off.

Based on the evaluation of the

proposal NSDC may ask for additional
security over and above 30% in the
form of hard collateral for proposals
entailing higher risk. The collateral, so
specified, will rest with NSDC till the
Secured Obligations are paid off.

Collateral may be reviewed every year Collateral may be reviewed every year
during the tenure of the agreement.
during the tenure of the agreement.
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Funding Guidelines- NSDC (2016)

Sl. No
13.

14.

15.

16.

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Parameter

Guideline for for-profit

Entity
Employability
NSDCs mandate is for creating
employability. Hence, proposals submitted
to NSDC have to ensure employability as
per the following definition;
In the case of fresh skilling, at least 70%
employment. In case of up skilling, the
nature of up skilling as proposed will be
examined as per the tenets of the Financial
Management & Procurement Manual.
Industry endorsement for the same will be
needed as a part of the proposal.
In case of self-employability, selfcertification by the person being skilled.
Any other parameter to be suggested by
NSDC on a case to case basis.
The employment verification will be carried
out as per the requirements of the
Monitoring Policy, available on the NSDC
website.
Proposal should have a clearly defined
Corporate
Entity owning the proposing entity, a clear corporate
structure and management team, and an
proposal
implementation and roll-out plan.
Details for first year plan should also be
provided.
Leverage
Proposal should leverage existing
existing
Infrastructure, land/ building etc. Proposal
infrastructure and should also leverage on existing training
content
content/ modules, if applicable, and rely on
the third party assessment and
certification, or leverage on capabilities of
parties suggested by NSDC from time to
time.
Linkages
Proposal should focus on linkages with
industry for training and placement.

Guideline for not-for-profit Entity

As for For Profit Entities

As for For Profit Entities

As for For Profit Entities

As for For Profit Entities

Funding Guidelines- NSDC (2016)

V.

Corporate Partnership with Financial Assistance:

Eligibility: Corporates listed in BSE/ NSE for more than 3 years with minimum credit rating of A- or foundation/social
ventures of similar corporates.
Criteria: At least 5000 persons to be trained per center over seven years in short term and long term courses. All other
terms and conditions as per NSDC Funding Guidelines.
Parameter

Guideline for for-profit Entity

Guideline for not-for-profit Entity

Corporates listed in
BSE/ NSE for more
than 3 years with
credit rating of A-

At least 5000 persons to be trained per

center over seven years in short term and
long term courses. All other terms and
conditions as per NSDC Funding Guidelines.

At least 5000 persons to be trained per center

over seven years in short term and long term
courses. All other terms and conditions as per
NSDC Funding Guidelines.

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Funding Guidelines- NSDC (2016)

VI.

Funding assistance to Private Universities, Engineering Colleges, ITIs, Polytechnics for

Skill Development:

Eligibility: Any firm/corporate / society / trust with sustainable and viable business model.
Criteria: At least 5000 persons to be trained per center over seven years in short term and long term courses. All other
terms and conditions as per NSDC Funding Guidelines.
Parameter

Guideline for for-profit Entity

Guideline for not-for-profit Entity

Funding assistance to Private

Universities,
Engineering
colleges, ITIs, Polytechnics
for skill development:

At least 5000 persons to be trained per

center over seven years in short term
and long term courses. All other terms
and conditions as per NSDC Funding
Guidelines.

At least 5000 persons to be trained per

center over seven years in short term and
long term courses. All other terms and
conditions as per NSDC Funding
Guidelines.

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Funding Guidelines- NSDC (2016)

VII.

Incentives and Disincentives (for training & skilling institutes):

Incentives for Placements

Disincentives for Training

Applicable for partners achieving min. 75%

of training targets as per agreement
Placement
Reduction of Effective Rate
Achievement
Interest
61%-70%
Nil
6.0%
71%-80%
1.0%
5.0%
81%-90%
2.0%
4.0%
Above 90%
3.0%
3.0%

Applicable for under achievement of training targets

as per agreement
Training
Additional
Effective
Achievement
Interest
Interest
51%-60%
0.5%
6.5%
41%-50%
1.0%
7.0%
Below 40%
1.5%
7.5%

a) Placement definition as per Common Norms

b) Rebate or additional interest to be calculated for a block of 3 years
c) In case of training achievement below 35% for consecutive 3 years NSDC will reserve the right to recall the
loan
d) Minimum rate of interest of 3% will still be applicable after applying all incentives (including those for higher
placement, underserved areas / underserved sector )
e) Projects with captive training and employment of up to 50% to be considered for funding
f) The incentives and disincentives will be applicable from FY 2016-17 onwards and will be as per monitoring
guidelines of NSDC

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Funding Guidelines- NSDC (2016)

VIII.

Funding Guidelines for Sector Skills Councils

National Skill Development Policy 2009 mandates NSDC to constitute Sector Skill Councils with the following objectives:
a) Identification of skill development needs including preparing a catalogue of types of skills, range and depth of
skills to facilitate individuals to choose from them.
b) Development of a sector skill development plan and maintain skill inventory.
c) Determining skills/competency standards and qualifications.
d) Standardization of affiliation and accreditation process.
e) Participation in Affiliation, accreditation, examination and certification.
f) Plan and execute Training of Trainers.
g) Promotion of academies of excellence.
h) Establishment of a well-structured sector specific Labour Market Information System (LMIS) to assist planning
and delivery of training.
Each Sector Skill Council should have a fair representation from Industry bodies, associations, academicians and
Government nominees. The SSC Proposal should endeavor to address the current and future skill needs of an Industry
Sector, including but not restricted to, Sub Para (a) to (h) above.

The following table details the guidelines for different parameters.

Sl.
No

Parameter
1. Proposal &
Business
submission

Guideline for Sector Skills Councils

Model

2. Nature/Mode of
Funding

3. Industry
Contribution
4. Viability of
Business Model

5. Collateral

6. Submission of
Detailed
project
report (DPR)
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The proposal should be submitted as per the templates available on the

NSDC website. The proposal submitted should have a clear cut strategy to achieve
the objectives of the Sector Skills Council as mandated by the National Skills Policy
2009.
NSDC may provide a funding of up to Rs 5 crore in the form of grant for the first 3
years of operation of the SSC.
Any further funding, if required: Additional funding may be granted or be made
available in the form of a loan (0-6%), depending on the case.
Rs. 50 lakh.
While viability and sustainability of the business model of a SSC remain an important
part of the evaluation, it should be accepted that most SSC plans may not be able
to envisage a clear revenue model. In the short term, SSCs will need to be funded
through grants. (SSCs across the world are government funded)
Collateral is applicable in case there is a loan component in total funding
sought from NSDC
1. First charge on all assets of the project funded by NSDC
2. First charge on cash flows of the project funded by NSDC
All SSCs must necessarily submit a detailed project report (DPR) at the end of 3 years
to NSDC. NSDC will then evaluate the progress and achievement of the SSC; and

Funding Guidelines- NSDC (2016)

Sl.
No

Parameter

7. Governing
Council/Governing
Board

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Guideline for Sector Skills Councils

also examine the need of further funding. The principles of further funding will need
to be discussed at the time of submission of the DPR.
The Governing Council/Governing Board of the SSC must have :
1. Adequate Industry Representation
2. Representation from concerned Ministry
3. Representation from Academia
4. Representation from NSDC
5. Any other , as deemed fit, for a particular industry sector

Funding Guidelines- NSDC (2016)

IX.

Funding Guidelines for Innovation Funding:

To strengthen the skill development ecosystem and to make it more responsive, effective, inclusive, and
efficient, there is a need to support out-of-the-box solutions and new concepts. Proposals that address such
specific needs may be considered for Innovation funding.
It is envisaged that such proposals, primarily targeted at underserved sectors and population with immediate
societal needs, may fall within the following broad areas.
1. Technology-aided solutions to address critical gaps in the skilling ecosystem. These solutions may be
developed by re-engineering existing solutions for better outcomes (reduced cost, increased access, better
monitoring, etc.), through new product development (simulators, assistive technologies, virtual learning
labs, improved content delivery etc.) or improving access to such products/services through adequate
provisioning of digital infrastructure (connectivity, information, native language access, banking, citizen
verification, etc.).
2. Market-linked value chain models that improve productivity, enhance quality, increase operational
efficiency or decrease risk with focus on rural and urban poor, e.g., tribal farmers, home-based workers,
bamboo artisans, slum dwellers, etc. and thus addressing the need of informal sector employability and
employment.
3. Disruptive products/solutions that will result in development of highly skilled workforce in
strategic/manufacturing sectors with domestic and/or overseas demand.
4. Project-based funding on a case-to-case basis for development of model skill development projects, viz.
Rural BPOs, cluster skill development programs, migration support centers, skilling for smart cities and
smart villages, etc. Thus, addressing and evolving solutions to critical issues currently untouched by most skill
development initiatives and in line with industrial and government focus.
5. Incubation, job orientation and enterprise development with stronger hand-holding support, improving
adaptability and acclimatization and providing strong post-training support to create higher sustainability
and viability for the entire ecosystem.
6. Large scale solutions-oriented models leading to engagement with Training Provider and Sector Skill
Council ecosystem thus developed, addressing important gaps across the skill development space ensuring
improved outcomes for the entities in the ecosystem
Hence, NSDC actively solicits proposals that could address some of these challenges. NSDC will work with other
critical stakeholders in skill development efforts (Central Govt. agencies, State Skill Development Missions,
autonomous institutions, reputed academic institutions, industry associations, etc.), examine each proposal
individually and establish the effect of the proposed solution/model.

The following table details the guidelines for different parameters.

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Funding Guidelines- NSDC (2016)

Sl. No
1.

2.

3.

4.
5.

6.

Parameter
Proposal submission

Guideline for Innovation

The proposal shall be submitted as per the template(s) provided/ uploaded on the
NSDC website. The project shall be for a minimum period of three (3) years,
however not exceeding a period of seven (7) years, clearly detailing out a
sustainable and viable business model. Any deviations may be considered at the sole
discretion of the Board of NSDC.
The proposal shall be evaluated as per the process set out in the Financial
Management & Procurement Manual.
The proposal is acceptable from any form of legal entity including but not limited
to Company/ Society / Trust as per the process and applicable laws and
guidelines.
No.
of
persons In case, the project may not have any direct training component, it must outline at
least 3 relevant, measurable milestones during its tenancy.
trained/Milestones
At least one of the milestones, thus envisaged, must be directly linked with the
existing Training Provider/Sector Skill Council network of NSDC
NSDC Funding
NSDC will provide funding assistance for creation of infrastructure, working capital
requirements and / or operational financial gap for the envisaged activity for up to
first three years of the project. NSDC assistance shall not be provided for creation
of immovable property such as land & building etc.
Extent
of
NSDC Funding would be up to a maximum of 75% of the investment requirement (subject
Funding
to conditions stipulated in Sl. No 3 above).
Promoter
Promoter Contribution shall be a minimum 25% of the investment requirement.
Contribution
Promoter Contribution shall be through fresh infusion in the form of share capital/
cash/ interest free subordinated loan from promoters or contribution in the form
of non-government grant specific to the project.
The amount of Promoters Contribution should be clearly reflected as part of
project financials.
If the Promoter Contribution comes in through unsecured loans or interest free
advance, it must remain invested in the Project till the Secured Obligations are paid
off and upon achievement of milestones to the satisfaction of NSDC.
Nature/ Mode of NSDC may provide funding in the form of loan, equity, preference shares,
Funding
debentures and grant. However, NSDC will prefer to provide funding in form of
loan. The proposal shall be examined by NSDC as per the process laid out in the
Financial Management & Procurement Manual.
NSDC may invest in the equity of the project implementing company based on
some of the following investment criteria:
a) Talented management team with a proven track record of creating stable
processes and profitable business;
b) Products and services with a sustainable competitive advantage in
target market;
c) Clear exit strategy
In case NSDC takes equity in an entity, then NSDC will reserve the right to
participate in management which includes veto power in major decisions and
reserve matters.
Please also refer to the Investment Management Agreement available on NSDC
website for all other matters like reserve matters, exit clauses etc.
Following points need to be noted in case of equity investment:

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7.

12.

13.

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Parameter

Guideline for Innovation

d) NSDCs equity stake shall be a maximum of 19% (may be higher subject to
approval of the NSDC Board)
e) NSDC retains the right of first offer to sell in case the proposing entity /
promoter decides to sell his (her) stake to another investor.

Grant funding is an exception and may be considered only in select cases. In such
projects, ownership of industry utilities thus created, such as content, certification
& assessment framework etc will rest with NSDC (to the extent of the grant thus
offered).
It may be noted that NSDC funding model may have a mix of grant, equity and loan
subject to the following:
a) Total NSDC funding not exceeding 75% of the total investment requirement
b) Equity contribution by NSDC to not exceed 10% of the total investment
requirement
c) Grant contribution by NSDC to not exceed 10% of the total investment
requirement
Any exception to the above shall be subject to the sole discretion of the NSDC
Board.
Principal Moratorium shall be for a period up to three (3) years, no moratorium
Moratorium Period
shall be granted on interest.
If the principal moratorium period extends beyond three (3) years, the PEC must
examine the need for the same and if recommended to the PAC, it must cite the
reasons for doing so.
Debt
Funding
Debt should be repaid within the tenancy of the project or earlier (including
Tenure and Rates
moratorium period, if any).
Interest Rate is 6% per annum (simple interest) for proposals.
This is applicable to all entities. Any exception shall be subject to the sole discretion
of the NSDC Board.
However, NSDC may extend a rebate of 3% p.a. provided all the following
conditions are fulfilled:
1. Projects having measurable impact on underserved geographies/sectors (as
already defined in the guidelines)
2. Achievement of minimum 50% of the project milestones from underserved
areas / underserved sectors
3. Fulfilment of obligations, terms and conditions in the agreement(s) executed
with NSDC.
Any prepayment of NSDC financial assistance in part or in totality from its
approved tenure shall be subject to approval of NSDC Board and in such a case
prepayment charges and other conditions may apply
Representation on the Where NSDC funding is in the form of Debt, NSDC reserves the right to appoint its
Board
nominee director(s) on the Board of borrowing entity.
Where NSDC funding is in the form of equity:
o < 10% stake, NSDC reserves the right to appoint at least its 1 director on
the Board of Directors of borrowing entity
o > 10% stake, NSDC reserves the right to appoint at least its 2 directors on
the Board of Directors of borrowing entity.
However, NSDC Director(s) shall hold a non-executive position.

Funding Guidelines- NSDC (2016)

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14.

14.
15.

17.

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Parameter
Mandatory Collateral

Guideline for Innovation

1. First charge on assets of the project.
2. First charge on cash flows of the project.
3. First charge on the Intellectual Property developed under the project (e gContent, Innovation technology etc.). Intellectual Property of the project
(e.g., Content, Innovation technology etc.) will vest with NSDC in case of
default in payment of the agreed Secured Obligations. Proposing entity
must apply for copyright at the earliest.
4. Pledge of shares to the tune of minimum 51% (can be relaxed to 26% in
case of previously invested entities) of the equity of the project
implementing entity. (Not applicable for entities other than companies)
5. Personal Guarantee/ Corporate Guarantee
6. Post Dated Cheques
Additional hard collateral which can include but not limited to a bank guarantee,
equitable mortgage of immovable property, lien on fixed deposits etc. may be
sought for projects entailing higher risk as per recommendations of the PEC, PAC
and Board of NSDC.

In case a proposing entity is offering a higher percentage of hard collateral in the

form of bank guarantee / lien on FD etc. then the personal guarantee / corporate
guarantee / other collateral may be waived off subject to approval of NSDC Board.
The collateral, so specified, will rest with NSDC till the Secured Obligations are paid
off. Collateral may be reviewed every year during the tenure of the agreement.
Employability
NA
Leverage
existing Proposal should leverage existing Infrastructure, land/ building etc. Proposal
infrastructure
and should also leverage on existing training content/ modules, if applicable, or
content
leverage on capabilities of parties suggested by NSDC from time to time.
Linkages
Proposal should focus on linkages with industry for various support systems.

Funding Guidelines- NSDC (2016)

X.

Sectors to be Funded:

Sl No
1.
2.
3.
4.
5.

6.
7.
8.

9.
10.

11.
12.
13.
14.

15.
16.
17.

18.
19.
20.
21.

Industry / Services
Automobile/Auto
components
Electronics Hardware

Skill Gaps In Demand

Machinist, welders, operators, painters etc. Drivers, Sales, Servicing,
Repair, Financial Services sales, Insurers/ Valuers etc.
Computers, Telecom, and Consumer Electronics Manufacturing, Sales,
Servicing/After Sales Support of electronics goods
Textiles & Garments
Power loom operators, Apparel Manufacturing, Fashion Design, QA,
Knitwear manufacturing, sewing machine operators.
Leather/ Leather goods
Tanning, Cutting, Clicking, Stitching, Lasting, Finishing etc.
Chemical &
Chemicals: Industrial and Chemical Manufacturing, Process Attendant,
Manufacturing Assistant, Lab Attendant, Equipment Operator, Sales.
Pharmaceuticals
Pharmaceuticals: Operators, Sales
Gems and Jewellery
Jewellery Fabrication, Grading, Faceting, Polishing, Cutting etc.
Building & construction
Crane Operators, Electricians, Welders, Masons, Plumbers, Carpenters,
Painters, etc.
Food processing/ Cold Operators/Workers, Packaging and assembly line workers, skills specific to
Chain/ Refrigeration
Food Grain Milling, Bakery, Dairy products, Meat and Poultry Processing,
Fish Processing, Fruit and Vegetables and Edible Oils
Handlooms &
Resident skill artisans etc.
Handicrafts
Building hardware and Cement: Mining, Blending, OHS, process compliance, machine
construction material
Operation, PLC etc.
Steel: Mining, Process compliance, Crane operation, machine operation,
maintenance
Construction Equipment: Manufacturing, Equipment operation,
maintenance, after-sales support, crane/hoist/dumper/forklift/ aerial
ropeway operation
IT or software services
IT Software Engineering, Maintenance and Application Development, Endto-End Solutions, Infrastructure Management, Testing, etc.
ITES BPO services
ITES BPO, KPO Legal, Medical, STM, Analytics and Research
Tourism hospitality and Front office staff, F&B Services and Kitchen and Housekeeping staff,
travel trade
Ticketing and Sales, Tour Guides,
Transportation &
Road Transport (Truck drivers), Warehousing (Loading supervisors,
Warehouse Managers, Warehouse Supervisors), Air Transport skills (Pilots,
logistics/ warehousing/
Aircraft Maintenance, Air Traffic Control, Instructors, Safety and Security)
packaging
Organised retail
Shop floor executives, back-store operations, merchandising
Real estate services
Front office coordinator, client management etc.
Media/
Entertainment/ Cinematographers, Editing, Script writers, Artists, Sound designers/
Broadcasting / Content editors
creation/ Animation
Animation Pre-Production, Animators, Game Design, Game Developer,
Radio Jockeys, Digital Camera Photography, Videography
Healthcare services
Doctors, Nurses, Technicians and Paramedics
Banking/ Insurance/
Financial Intermediaries (including Direct Selling Agents), Banking and
Insurance (including agents), NBFC, Mutual Funds
Finance
Education/ Skill
School teachers, teachers in higher education, trainers for technical and
vocational training (especially modular skills training)
development services
Unorganised sector
Unorganised/Informal sector: The unorganised sector consists of all
unincorporated private enterprises owned by individuals or households
engaged in the sale and production of goods and services operated on a
proprietary or partnership basis and with less than ten total workers.
Unorganised/Informal employment: Unorganised workers consist of those
working in the unorganised enterprises or households, excluding regular
workers with social security benefits, and the workers in the formal sector

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Industry / Services

22. Infrastructure Sector

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Skill Gaps In Demand

without any employment/ social security benefits provided by the
employers.
Architect/designer, Draftsman, Supervisor/Foreman, Surveyor, Mason,
Carpenter, Plumber, Electrician, Bar Bender/Binder, Blacksmith, Welder,
Machine Operator, Machine Driver, Painter, Glazier, Fitter, Erection Gang,
Engineer, Grinder, Radiographer, Rigger, Gas Cutter, Store Keeper.