Mumbai: In seven years to 2022, the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has trained 13.7 million candidates, but only 18% or 2.4 million were successfully placed in jobs, government data show. Besides low placement rates, a Lok Sabha standing committee--in December 2022--highlighted key issues including underutilised funds, infrastructure deficiencies, dropouts, a disconnect with industry and insufficient state engagement. To enhance programme effectiveness, experts recommend aligning PMKVY with local economic needs.

Launched in 2015, PMKVY is the Union government’s flagship skill development programme and offers free short-duration training. The programme comprises three components: short-term courses offering 200- to 500-hour training; bridge courses to recognise and enhance existing skills through 12- to 80-hour modules; and special projects providing short-term training in approved job roles. Candidates are given monetary rewards on completion of certification as an incentive.

The centrally-funded programme operates under two models: centrally managed with the National Skill Development Corporation as the implementing agency, and state-managed where state skill development missions/state governments are responsible. While PMKVY 1.0 (2015-16) focused on training ecosystem development, the second version (2016-20) introduced district skill committees, recognition of prior learning through bridge courses and special projects. In this version, 20% of the total payout to training providers was linked to placements. This was increased to 30% in PMKVY 3.0 (2020-22). In January this year, the Union government introduced the fourth version of the programme.

During January-March 2023, India had an unemployment rate of 6.8%, according to data from the quarterly Periodic Labour Force Survey (PLFS), while youth unemployment rate (for ages 15 to 29) stood at 17.3%. Annual PLFS reports show a declining trend in unemployment, the government told Parliament. While the overall rate was 4.1% in 2021-22, down from 4.8% in 2019-20, the youth unemployment rate declined from 15% to 12.4% during the same period.

Only 2.4% of India's 530-million strong workforce has acquired formal vocational education or training, said Santosh Mehrotra, Research Fellow, IZA Institute of Labour Economics, a Germany-based institute focused on labour economics. That means either the remaining workforce has no vocational education or training or acquired it only informally. Such a workforce cannot be very productive, he explained. Moreover, a quarter of India's workforce has less than primary education, he added. This makes skill development programmes significant to decrease unemployment rates.

PMKVY 2.0 had both the highest number of trained and placed candidates, with a placement rate of 19.5%. This fell to 5.8% for PMKVY 3.0, the lowest yet. Overall, about 11 million trained candidates completed certification.

UP has most candidates trained, Telangana has highest placement rate

Uttar Pradesh, the country’s most populous state, had the most candidates trained at 1.59 million and the highest number placed at 338,882. This was followed by Madhya Pradesh with 900,000 and Rajasthan with 890,000 trained candidates. Lakshadweep trained 270 candidates and placed none--the lowest in the country--followed by Goa (10,065 trained and 1,105 placed) and Sikkim (13,803 trained and 3,942 placed).

Telangana had the highest placement rate (35.1%), followed by Puducherry (34.6%). UP, MP and Rajasthan had placement rates of 21.3%, 24.4% and 20.8%, respectively. Maharashtra had the lowest rate at 9.3%, followed by Kerala (10.4%) and Jharkhand (10.7%).

NSDC primarily partnered with private vocational training providers due to the lack of private Industrial Training Institutes (ITIs) at the time, Mehrotra explained. However, the shorter training duration of NSDC courses (3-4 months) compared to the 1-2 year programmes offered by ITIs is a major challenge, he added.

Poor utilisation of funds

Only 56% funds allocated to the programme were utilised in 2016-17, government data show. This number improved to 98% in 2020-21, but fell to 72% in 2021-22.

Training and placement operations were suspended due to Covid-19 restrictions, which led to a significant decrease in enrollment and certification, and therefore low disbursement and utilisation of funds, according to the Lok Sabha standing committee. Training under PMKVY 3.0 is ongoing and expenditure is expected to increase on completion of the training, the committee noted.

Connect to industry

NSDC was established in 2008 as a public limited company, but it is now a private limited company, says Paaritosh Nath, assistant professor focusing on decent work at Azim Premji University. It collaborates with partner trainers to execute skill development programmes, but it is still significantly influenced by government involvement. Most of the funding now comes from the government, he adds.

One notable challenge is the disconnect between NSDC and the industry. Skill development programmes often fail to align with the actual regional demand for skills, creating a mismatch between training and local economic needs. Industry participation, particularly in apprenticeship programmes, has been limited, Nath explained.

“The choice of the particular skill being imparted, the programmes run as well as the quality of the training itself are often not up to the market requirements. The skill centres are not adequately equipped for the practical training. A lot of training ends up being theoretical, with little bit of practical component,” says Amit Basole who leads the Centre for Sustainable Employment at Azim Premji University.

The Lok Sabha’s standing committee also highlighted this disconnect, and suggested a survey of industry representatives to understand the needs better.

Candidate dropout, infra deficiencies

About 20% of candidates who enrolled under the programme dropped out, data from a study conducted by Indian Institute of Public Administration (2016-20) show. Medical issues, family obligations, social challenges, lengthy commutes to training centres, marital status changes, increased livelihood demands, limited job opportunities, and perceived skill stagnation were cited as reasons. Some female candidates left due to pregnancy, marriage, and course duration based, the study found.

Factors such as distance to training centres and accessibility to jobs can be addressed by the ministry, the standing committee noted. In case of the female dropouts, the committee suggested that the ministry may rope in ASHA and anganwadi centres to create awareness about the benefits of skilling and encourage the female members who drop out owing to pregnancy, to resume training as soon as possible post delivery.

Under PMKVY, 818 Pradhan Mantri Kaushal Kendras (PMKKs) or training centres were allocated in all districts of India. However, only 722 PMKKs had been established by June 2022. Of the rest, 58 PMKKs were surrendered to the government by private vendors due to operational difficulties, while 38 approved PMKKs were yet to be established due to reasons such as infrastructure constraints, Covid-related challenges, financial stress from the pandemic, and non-allocation of targets.

Another issue faced by the scheme is lack of eligible trainers. Many states have reported that centres are not operational due to a lack of trainers. The government has planned to create a pool of National Assessors and Trainers under PMKVY 4.0.

Limited state participation

State disparities exist, driven by varying economic and employment histories, Nath says. Some states have a significant agricultural workforce, where programmes like the Mahatma Gandhi National Rural Employment Guarantee Scheme play a crucial role, while others like Maharashtra or Tamil Nadu have more opportunities for employment. This underscores the need for localised, demand-driven approaches, where employment schemes extend from metropolitan areas to tier-2 and tier-3 cities, addressing specific regional challenges, he explained.

Participation of states became a feature of the PMKVY 2.0 in 2016-20 as it was believed that this would enhance support and monitoring, and enable targeted training aligning with local needs and aspirations, thereby improving efficiency of the programme.

However, the state-managed model faced issues such as delays in the release of funds from the state treasury to respective departments, a shortage of trainers with the necessary eligibility criteria, a lack of available placement partners, and delayed payments to training partners. Further, the online management system for the state-managed component was operational in only 15 states and Union territories, affecting coordination with the Union government. Further, state skill development missions have reported delays in disbursal of funds due to IT modules not being available in many states.

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