Innovative Skills Development Financing in India : Scope of Impact Investing in Financing Skilling in India

India is one of the fastest growing economies of the world. With over 800 million people falling within the working age group bracket, India has a significant demographic advantage to further its economic growth and development. The country's demand for the skilled labour is expected to rise by 20% between 2017 to 2022, generating an additional demand of 100 million skilled workers by 2022 across 24 sectors. More than 12 million people enter the workforce each year, with 300 million young people joining the workforce by 2025. Yet few have the skills required for employment. To reap the benefits of the demographic dividend, the Government of India, under its National Policy for Skill Development and Entrepreneurship 2015, has set a target to skill 400 million people by 2022. Out of this number, 150 million will be trained by the private sector, supported by a public-private partnership called National Skill Development Corporation (NSDC). This paper identifies the various financing mechanisms for funding skills development in India. The paper looks at various innovative financing mechanisms (outcome-based bonds, SIB, DIB, fund of funds etc.), and their feasibility to finance skilling in India