Management Development Training

MANAGEMENT DEVELOPMENT AND TRAINING:
THE INDIAN EXPERIENCE
R.K. Mishra*
The purpose of this paper is to provide the backdrop of the socioeconomic and political scenario of India, discuss the role of
management development and training in the context of the economic
challenges confronting the country and the opportunities arising
thereof, critically analyse the status of management development and
training at the levels of the government, public enterprise and private
sector, and offer a few suggestions to radically transform the
management development and training in India.
Socio-economic and Political Scenario in India
India was at the time of independence, a socially, economically and
politically underdeveloped nation. This state of affairs was the
consequence of the exploitative regime of its colonial masters. 200
years of foreign rule sapped away the entrepreneurial initiative. The
incidence of poverty was very high. The industrial base was very small
and unemployment was a characteristic feature of the economy. The
Indian economy was in isolation from the rest of the world. The
masses did not have access to formal education and professional
training. There were a handful of universities, engineering colleges,
medical colleges and institutions imparting education at the graduate
and post graduate levels. The country was divided into British India
and several princely states. The country became independent in 1947
and chose to function under the Constitution adopted in 1950 which
laid emphasis on all round human development.
During the recent years, the stress on human development has been
tremendously enhanced owing to the realisation of the fact that the
educational and professional development alone can bring about a
socio-economic transformation capable enough to place the country in
the category of developed nations. There is a commonly held view that
this approach can take India out of the viscous circle of poverty and
underdevelopment and make it progressively strong technologically
due to a continuous availability of scientific and industrial personnel.
_____________________________________________
*Professor & Dean, Institute of Public Enterprise, Hyderabad-7
Management Development & Training- The Indian & Global
Context
It is common knowledge that management development and training
are two sides of the same coin viz., Human Resource Development
(HRD). However, some experts draw a fine line of distinction between
the two1.
They assert that training is a short term facet of HRD concerned with
the development of present skills of a job and also the future skills
that would help in its efficient execution. Management development on
the contrary is a long term and continuing phenomenon equipping a
person with skills and concepts that could prepare him to take up new
responsibilities and challenges2.
Exhibit-1 shows the approaches that could be adopted for
management development and training for the different layers of
management.
Exhibit-1
Global
Visits
for
Sensiti
sation
Area
of
Import
ance
Semi
nar
&
Conf
eren
ces
Attachme
nt
to
eminent
Institutio
ns/Exper
ts
Round
Table
Approaches
Self
Refresh
Stu
er
dy
Course
s
Unde
r
Stud
y
Meth
od
Formal
Trainin
g
On-theJob
Training
Top
Managem
ent
Senior
Managem
ent
Junior
Manag
ement
Indian economy is no longer a traditional economy. Not only its
structure is undergoing a decisive change but it is also inculcating the
features of the new economy that are prevalent in highly developed
countries such as the United States of America and Japan.
Until recently India treated its human capital as inert stock on the
same lines as accountants treat the fixed capital. But influenced by
the Japanese, the US, more recently the Chinese and the ASEAN
miracle in the early 1990s, the political view of the human capital
underwent a paradigm shift. The government reconstituted its Cabinet
2
and the administrative set up and carved out a new ministry of HRD
with a full fledged senior minister of the Cabinet heading it and the
administrative support extended by a permanent secretary. The
central idea behind the creation of the ministry was to provide to the
government an integrated view of the human resources available in
the country and plan and implement suitable schemes and systems to
upgrade/ increase the supply of human resources commensurate to
their requirements for the development of the country to meet the
present and the future challenges.
A study of the key ratios relating to the management development and
training forming a major part of the HRD, shows that the training &
management development expenditure per employee was US $960 in
Europe, US $531 in Canada, US $386 in Japan and US $650 in USA.
The training and management development expenditure as percentage
of payroll was 3 percent in Europe, 1.5 percent in Canada, 1 percent
in Japan and 1.8 percent in the USA. The employee to trainer ratio
was 257:1 in Asia and Pacific, 504:1 in Canada, 1706:1 in Japan and
400:1 in USA. The percentage of employees receiving training was
75.5 in Europe, 68.9 in Canada, 44.9 in Japan and 75 percent in the
USA. The payments made to outside experts / training institutions as
percentage of total expenditure was 45.4 percent in Europe, 27 in
Canada, 31 in Japan and 27 percent in USA. The Indian proportions
are miniscule and do not deserve any mention. This can be seen in the
context of the expenditure on HRD as a percentage of GDP. USA and
France spend about 20 percent of their GDP on HRD. A small country
such as Belgium spends about 40 percent on HRD. India pledged to
spend a mere 6 percent of GDP on HRD in 1986. Currently it spends
about 3 percent of its GDP on HRD. All these countries spent about 14 percent of the money on training and management development as a
percentage of their turnover. They have integrated their management
development and training activities with the primary, secondary and
higher education. Motorola, a US based company spends about US $1
Billion on management development and training. The company
proposes to hike this outlay. On an average each employee spends
about 160 hours per year on training. The company has set up a
university and has adopted 32 districts in the USA to upgrade the
standards of education. In Japan, informal management development
and training is more widespread as compared to the formal, on the job
and off the job training and management development as existing in
India. An average Japanese employee spends about a 100 hours in
training per year. Technologically, an average Japanese employee is
conversant with the use of CD-ROM, e-mail and company internet,
although to a lesser extent than the average US employee. It is
claimed that India is emerging as an IT superpower. However, an
average Indian employee is wide off the mark as compared to US and
Japanese employee.
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The global competition, initiation of economic reforms and the
country’s ambition to join ranks with the developed countries require
that its existing approach to management development and training
undergo a fundamental change as explained in Exhibit-II.
Exhibit-II
Management development and Training in India
From
To
Conservative
Liberal
Specific
Generic
Functional
Cross-Functional
Hierarchical
Participative
Periodic
Continuous
Risk Aversion
Risk Taking
Formal
Informal
Traditional
Modern & Topical
Unsystematic
Systematic
General
Goal Oriented
Closed
Open
Skill Based & Narrow
Concept Based & Comprehensive
Static
Dynamic
Ad hoc
Planned
Structured
Customised
Inorganic
Organic
Directed
Environment Driven
India is opening up. The challenges of opening up provide a wide
range of opportunities subject to the acquisition of relevant skills,
competencies and concepts. The management development and
training in the pre-reforms era of 1947-1991, required a limited
innovation and thinking dealing with the needs of internal progression
within the organisations and the methods and techniques that could
increase the production and productivity of workers and supervisors
on the shop floor or offices. The present day concept of management
development and training envelopes an all round development
covering the needs of the individual, team, organisation and society.
Status of Management Development & Training
The Indian economy is composed of three important organs:
government, public sector and private sector. In this section, an
attempt has been made to analyse the status of management
development and training as related to these three organs.
Government
There are three levels of Indian Administration: central, provincial and
local. These three levels employ about 20 million personnel. At the
central level, there are 4 classes of employees viz., A, B, C & D group
employees. Group C & D employees provide support services to
officers of Group A & B services which are 29 in number of which the
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first 12 fall within the scope of the Group A and are considered to be
the top most central services.
For Group A employees, recruitment is done by the Union Public
Service Commission and the foundation training is imparted by the
Lal Bahadur Shastry Academy of Administration, Sardar Vallabhai
Patel Academy for Police Administration, etc. The Department of
Training and Personnel deals with the continuous training of the
officers of the Indian Administrative Service which number around
6000. 83 institutions of higher learning and research have been
identified to provide advanced training in policy, general management,
functional management and technology areas. The advanced training
varies from one to three weeks and is optional in nature. The
government provides for the entire expenditure. There are some
courses which are vertical in nature which admit participants of all
the seniorities whereas other courses are demarcated for officers
having a certain minimum experience of service. The central
government officials are provided slots for management development
and training under schemes such as the Colombo Plan which entitled
them to receive education in management and undergo advanced
training in general and functional management. They are also entitled
for fellowship awards allocated by foreign countries. The provincial
governments have set up state academies which train the officials
drawn from the different services mostly selected by the State Public
Service Commissions. These state academies are funded by the state
governments but receive a generous support form the central
government. The local governments do not provide management
development training opportunities to their employees as their own
funding is very trivial tantamount to less than one percent.
The training and management development budget is miniscule and
the areas covered are negligible. The training needs are not kept into
consideration. The behavioural training is the most important
requirement receiving scant attention. The training in technology is
another important need of the time. Some states of the Indian Union
have caught up with the idea and have taken up programmes in egovernance. Andhra Pradesh, Karnataka, Tamil Nadu and
Maharashtra are making rapid strides. The central government in line
with the move of these states has also initiated imparting training
programmes in e-governance to the employees in select departments.
The Subordinate Staff Selection Services Commission of the central
government conducts a large number of programmes for employees in
the cadre of the section officers.
The salaries and wages as a percentage of the gross domestic product
for the country as a whole as related to the central and state
governments is about 12 percent. The money spent on training and
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management development is a meager 0.1 percent. The number of
hours devoted to training and management development is less than 1
per year. Vast sections of the government employees specially in the
Group C and D constituting about 90 percent do not get any
opportunity for management development. Their training is limited
only to induction training.
Management Development & Training in Public Enterprises
There are about 1400 public enterprises at the central, state and local
levels organised principally in the form of government companies,
statutory corporations, departmental enterprises, commissions,
authorities, boards, mixed corporations and port trusts. These employ
about 6 million personnel. The investments in these enterprises is
about US $120 billion. The salaries and wages in these enterprises
constitute 12 percent of their turnover which may be as much as US
$120 billion. The expenses on training and management development
are about 0.5 percent of the turnover.
Features
Training and management development is an important activity in
public enterprises which is discernable from the following features:
1. There is a definite direction existing in relation to management
development and training in public enterprises. The Department of
Public Enterprises, Govt. of India and the nodal agencies on state level
public enterprises have their respective policies incorporating
guidelines on themes to be covered, types and number of programmes
to be conducted, duration of the programmes and the resource
persons to be deployed. The policy covers even items such as the
remuneration for the resource persons and the evaluation of the
training programmes.
2. In the management structure, at the board level, invariably the
function is represented by Director(Personnel) who in turn is
supported by Executive Director (Personnel) / General Manager
(Personnel), Deputy General Manager (Personnel), Assistant General
Manager (Personnel),
Senior Manager (Personnel), Executive
(Personnel), Personnel Officer, etc. In many a case, General Manager
(Training) is appointed as in-charge of the function. In other words,
training and management development is a high level function in
public enterprises. The state level public enterprises also accord high
importance to this function though in many such enterprises it is not
placed at the level of General Manager due to a consideration of size.
3. Separate budget provisions are earmarked for this function
although they are very miniscule as related to turnover and expenses
incurred on wages and salaries.
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4. In terms of hardware, separate space is allocated for the
functionaries dealing with management development and training,
equipment provided and support structure created in terms of
assistance, transport facilities etc. It may however be noted that the
quality of budget support and assistance differs widely from enterprise
to enterprise.
5. A Training Needs Survey is carried out once in 5-6 years on the
basis of which a training calendar is formulated. The operating
departments and the management services department/ corporate
strategy department are approached for obtaining appropriate inputs.
Small changes are carried out in the training calendar depending on
the feedback of the participants. The major gaps in different areas for
the three levels of management are given in the Exhibit –III:
Exhibit –III
Gap Areas
Knowledge
Skills
Attitude
Managerial Levels
Top/Senior
Middle
Technology
Procedural
Knowledge
Conceptualisation
Analytical/Adaptiv
Planning
e
Towards
Logical
Environment
Performance
Target Setting
Policy
International
Scenario & Public
Policy
Application
Skills
Sensitisation
and
Junior
Implementing
Knowledge
Executive Skills
Towards Work
and
Organisation
Appraisal
&
Recognition
Nil
6. Training programmes for workers, supervisors and junior
executives are organised inhouse. For the middle level personnel the
programmes are arranged in house with a mix of internal and external
faculty. For senior and top level personnel, slots are provided for
training in external institutions and abroad.
7. Induction Training/ Foundation Training is a rule rather than
exception. The period of the training varies from 6 months to 2 years
at this level.
8. About 40 large central public enterprises such as Bharat Heavy
Electricals Ltd., Steel Authority of India Ltd. , National Thermal Power
Corporation, Coal India Ltd., Electronics Corporation of India Ltd.,
Mishra Dhatu Nigam Ltd,., Bharat Dynamics Ltd.., Hindustan
Aeronautics Ltd., HMT Ltd., have set up their own in house training
institutes. These provide training to senior managers in general
management, middle/ junior managers in functional areas of
management and specialised courses to senior and top managers in
7
total quality management, quality circles, memorandum of
understanding and corporate planning. These in house institutes run
Junior Management Induction Programmes.
9.At the State level, such inhouse training institutes are maintained
by the state electricity boards and the state road transport
corporations. The state financial corporations and the state industrial
development corporations also take up the management development
training activities on systematic basis, though they do not have their
own inhouse training institutions.
10.The public sector banks form the lifeline of the financial system in
the country.
There are in all
about 90 banks excluding the
cooperative banks. Most of these banks have their inhouse training
departments. The large banks such as the State Bank of India,
Punjab National Bank, Central Bank of India, Bank of Baroda, Andhra
Bank have their own inhouse training institutes3.
In a study
4
conducted by Mishra and Ravishankar about the Human Resource
Development in State Bank of India, the largest commercial bank and
one of the 500 Fortune Companies with a sample of officers
numbering 850 in senior/middle management cadres. It was noted
that there was an urgent need to develop technical and managerial
skills and bring about attitudinal changes in the work behaviour of
the executives. The linkage of the training with the operations process
of the bank was not complete. The deputation of trainees to a
programme was not always on grounds of actual needs. Much
subjectivity operated in the field. The managers at operations level felt
that deputing personnel for training interface with the operations
work. Moreover, the skills imparted and the change brought in the
behaviour of the trainees fade out quickly and regression sets in once
they face the operational realities and mounting skeptics from their
colleagues. With the integration of information technology and
banking operations the inhouse training institutes of Banks have to
now prepare a new menu. In fact, the experience emanating even from
a country like the USA reveals that the bank personnel would like to
redefine their operations and needs in the perspective of information
technology. They feel that the run of the mill training programmes are
a mere waste of their time. What they need today is an intensive
understanding of information technology which can keep them
relevant for society.
Evaluation of Hyderabad based Inhouse Training Institutes
Recognising the importance of management development and training,
40 public enterprises set up inhouse training institutes of which 10
are located in Hyderabad. The evaluation of these institutes in terms
of faculty, infrastructure, library, research and consultancy, financial
muscle and composite score is given in the Exhibit IV:
8
Exhibit: IV
Financia
l
Sources
Total
Score
Overall
Rating*
2
Researc
h/
Consult
ancy
1
3
11
2
2
1
2
8
1
1
1
1
1
5
Somew
hat
Accepta
ble
Somew
hat
Low
Very
Low
3
5
3
2
3
16
Accepta
ble
1
3
2
1
3
10
3
3
3
2
3
14
Somew
hat
Low
Accepta
ble
2
2
2
1
3
10
Name
Fac
ulty
1
Infra
stru
ctur
e
4
Electronics
Corprn
of
India Ltd.
Mishra Dhatu
Nigam Ltd.
1
Indian Drugs
&
Pharmaceutic
als Ltd.
Bharat Heavy
Electricals
Ltd.
Bharat
Dynamics
Ltd.
Hindustan
Aeronautics
Ltd.
Hindustan
Machine
Tools Ltd.
Hindustan
Cables Ltd.
Library
Somew
hat
Low
1
2
1
1
2
7
Somew
hat
Low
Indian Airlies 2
5
2
1
3
13
Somew
hat
Accepta
ble
* Scale (Based on Total Score): 0= Poor, 3.5= Very Low, 7= Somewhat Low,
10.5= Somewhat Acceptable, 14= Acceptable, 17.5= Good and 21=Very Good.
The reasons for nominations to the courses sponsored by the inhouse
training institutes point out that they do not conduct need based
training. Of the 500 executives who were trained by these institutes, it
was revealed that 8 percent were sponsored as per the training needs
identified in annual assessment, 15 percent were nominated due to
changes in job content, 12 percent were nominated due to initiative of
the trainees who intended to upgrade their capabilities, 25 percent
were sponsored to fulfill training quotas, 15 percent were nominated
to pacify their wishes of being sent for external training and the
remaining 25 percent did not know as to why they attended the
training. Regarding the actual benefits from the training, 29 percent
felt that there was nothing worth mentioning about it and a even a
larger percentage felt that it was a retreat from the company work.
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only 15 percent participants felt that the training helped them in
sensitisation to changing roles and the remaining 21 percent felt that
the training gave them new knowledge, skills and attitudes. The
applicability / usefulness of the programmes were rated at 2.8 on a
scale of 1 to 5.
Department of Public Enterprises
The Department of Public Enterprises (DPE) is the nodal agency for
central public enterprises. One of its divisions deals exclusively with
management development and training. It does get directly involved in
these activities but operated through a network of about 75
institutions for the conduct of programmes ranging from one-day to
one-year. It arranges programmes on topical themes, functional areas
and general management. The management hierarchy is given due
consideration. It does not provide any financial help, faculty support,
infrastructure assistance to the training institutes. It organises a
meeting on an annual basis of the training heads and sensitises them
about the requirements. On the basis of decisions arrived at in the
meeting, a training calendar is formulated. The DPE issues a
forwarding letter for each training programme which has to be
dispatched by the respective institutes. In 1983, the DPE initiated an
advanced management programme for general mangers / assistant
general managers/executive directors who could take over superior
positions within the enterprise or shift horizontally. The advanced
management programme (AMP)5 exposes the top level executives to
emerging trends in management of enterprises as well as to the state
of the art management techniques in India and abroad. The DPE has
conducted 34 AMPs between 1983 and 1999 with the premier
management institutes such as the Administrative Staff College of
India, IIM Ahmedabad, IIM Calcutta and IIM Bangalore. Recently they
have approached the Institute of Public Enterprise, who provided the
initial inputs on AMP when it was being conceived in early 1980s. The
DPE nominates a few public enterprise executives at the senior /
middle levels to MBA Programme run by the University of Hull (The
United Kingdom). In addition, executives have been recommended for
training by DPE to Germany, Singapore, Japan and the USA. The
DPE’s administrative approach and indifference to training and
management development has not done any good to this very
important instrument. A number of training programmes sponsored
by the institute get cancelled /postponed. A large part of the
remaining ones are unable to muster even a respectable number of
participants.
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Management Development & Training in Private Enterprises
Bitten by the globalisation bug, the public sector is on wane and a
new private-public sector mix is emerging in which the public sector is
required to play a supportive role. The private sector is on the growth
path. It has a formidable challenge to reorganise its human resources
to rise to the occasion. Family business will no more help private
sector enterprise grow. Moreover, private sector has to move from old
economy to new economy where owners and employees will be
subordinated by the enterprise. The private sector having taken a leaf
out of the change book, is now going for employee stock ownership
scheme, employee stock options, greater representation to the
employees on the board and professionalisation. Nevertheless, it has
to be admitted squarely that the status of management development
and training in private enterprise is no better than the public
enterprise. Some big business houses such as Tatas (they run the
Tata Management Centre), Birlas ( they run the Birla Management
Centre), Reliance (they run the Reliance Management Academy) and
Kirloskars (they run Harihar Institute of Management) have their own
academies catering to the needs of top and senior level personnel.
Some business houses have set up management institutes/
universities to integrate the requirement of management development
and training with the undergraduate education. These include Tatas
who have a major say in the running of Xavier’s Institute of Labour
Relations and Institute of Management Technology and Birlas (Birla
Institute of Science and Technology). Recently some big business
houses in India with the support of the government of Andhra Pradesh
and in collaboration with Kellogg Institute of Management have set up
an International Business School at Hyderabad which will impart
education in management for MBA Degree and Doctoral Degree.
Though there is a technology boom in India and the TMT (TechnologyMedia-Telecom) business is on the rise, it has not led to any increased
commitment to the management development and training. Even
Infosys, Wipro, Himachal Futuristic Communications, Bharati
Telecom, Zee Tele, etc. have no academies of their own. Satyam
Computers Ltd., a leading info-tech enterprise, plans to provide a bold
relief in this regard as it is in the process of setting up an e-business
academy with a proposed investment of US $ 0.1 Billion.
The All India Council of Technical Education, Government of India has
seen to the setting up of 700 management institutes in the private
sector with an intake of 30,000 students per annum for MBA courses.
A survey on the quality of education and infrastructure of these
institutes point to a number of gaps. The private sector has not taken
much interest in developing these institutes which is reinforced by the
11
fact that some of the business houses have used these institutes as
milch cow.
The private sector cannot make any meaningful beginning on the
management development and training front unless it changes its
philosophy of scouting for human resources afresh for meeting a
challenge rather than developing the existing personnel.
Future Directions
The country has to change both its perception and approach to
management development and training as explained hereunder:
1. The percentage of expenditure of GDP on education needs to be
stepped up significantly say at least to 10 percent. Some innovative
methods and techniques may have to be evolved for financing the
enhanced outlay. More importantly, the development strategists have
to reformulate their preferences assigning a higher weightage to
software than hardware. Inline with the USA, Germany and France,
the primary, secondary and higher education have to be integrated
with the needs of management development and training.
The Singapore experience needs a special mention here. It has set up
a Skills Development Fund (SDF). Employers are required to
contribute 1 percent of the gross salary and wage bill to the fund. The
company’s get the value of their contributions back upto 80 percent if
they apply to SDF for grants for enhancement of skills and
management development. They may also buy out of these grants
more than training equipment, establish training facilities, spend
money on overseas training or expand the existing facilities of
training. The employers wanting to have access to the SDF submit the
total training plan. The experience shows that the grants awarded are
twice the amount initially requested. The fund has contributed
towards modernising the training establishments, infusing new skills
and upgrade the conceptual abilities of executives aged 40 years and
above. Th fund has also been accessed for general development and to
ensure the continuity in competence of a cluster of industries which
are globally competitive.
2. The public enterprises need to step up their outlay on management
development and training. The number of hours devoted should be
gradually increased from the present 10 to 100. The expenditure
needs to be doubled from 0.5 percent of the turnover to 1 percent. The
inhouse training institutes have to tone up their work. The training
contents must accommodate the inputs dealing with globalisation,
technology management, international business, quality management,
cost leadership, enhancement of market share, improving
interpersonal skills, team building6, counseling, knowledge
12
management, creativity and performance appraisal to mention a few.
The training needs survey in each enterprise should provide for multiskilling and the possibility of development of the executives in diverse
areas. The management development and training must cut across all
the levels7 including the top management i.e., public enterprise
boards.
3. The private sector in order to gain tremendously to be globally
competitive through a leading edge must exploit the potent tool of
management development and training. Instead of looking for new
people to fulfill the requirements of the changes in a job, they should
impart new skills well in advance to their existing employees. The
miniscule expenditure and time spent on management development
and training by the private sector will not go a long way in its
professionalisation.
Conclusion
Management development and training will play a significant role in
the socio-economic and political emancipation of India especially in
the changed context of globalisation. Bitten by the globalisation bug,
the government, public sector and private sector are redefining their
vision of management development and training. Although the
management development and training function has not made
significant headway so far, the country is now well set to undergo a
paradigm shift in this direction.
References:
1. Mumford Alan, “Management Development: Strategies for Action”, Jaico,
Mumbai, 1995, p.7.
2. Singh N.K. , “Human Resource Development in Indian Public Sector”, Standing
Conference of Public Enterprises, New Delhi, 1987, p. 10.
3. Khandelwal, Anil K (ed.) “ Human Resources Development in Banks”, Oxford &
IBH, New Delhi, 1995, pp:377-466.
4. Mishra R.K. & Ravishankar S. “Organisational Development in Public
Enterprises: Perspectives for 1990s”, Vision Books, New Delhi, 1989, pp: 125130.
5. Govt. of India ( Department of Public Enterprises, Ministry of Heavy Industries &
Public Enterprises,), “PE Survey: 1998-99”, Vol.1, 2000, New Delhi, pp. 132-135.
6. Ravishankar, S. Training & Management Development for Higher Productivity in
Pai Satish, Mishra R.K .and Ravishankar S (ed) “Re-Engineering Organisational
Productivity, Challenges Ahead”, Himalaya, Mumbai, 2000.
7. Lynton Rolf P and Pareek Udai, “Training for Development”, Vistar, New
Delhi.,1990, p.8.
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