The Parliamentary Standing Committee on Labour, Textiles and Skill Development submitted its thirty-sixth report recently on the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) implementation. The PMKVY seeks to promote skill development by providing free training programmes and monetary rewards for obtaining certification. It aims to remove the ‘disconnect between demand and supply of skilled manpower, building vocational and technical framework as well as new skills and innovative thinking’. A vision of a ‘skilled India’ is sought to be achieved.
India is a country with about 65 percent of its youth in the working age group. The only way we can reap the demographic advantage is through skill development. As the Standing Committee report states, "It is acknowledged that skill and knowledge are the driving forces of economic development. With one of the youngest population levels, India can realise its demographic dividend through a workforce that is trained in employable skills and is industry ready."
The Ministry of Skill Development & Entrepreneurship (MSDE) has spearheaded PMKVY to drive the skilling programme across the country through Pradhan Mantri Kaushal Kendra’s (PMKK) state-of-the-art training centres. The PMKVY scheme was launched in 2015 to encourage and promote skill development with an initial outlay of Rs 12,000 crores.
The scheme was grant-based, providing free-of-cost skill development training and skill certification in more than 1,800 job roles to increase the employability of the youth. The scheme was to be implemented through Centrally Sponsored Centrally Managed (CSCM) and Centrally Sponsored State Managed (CSSM) components.
It is in this background that the report makes significant reading. Currently, PMKVY 3.0, launched in January 2021, is in operation. The report highlights that despite revisions in the scheme, the problems of the earlier versions persist. The report specifically highlights the underutilisation of funds. In the 3.0 version, only 72 percent of the funds have been utilised. Thus, there has been low distribution and underutilisation of funds.
The report has rightly pointed out that the success of the skilling programme depends entirely on the job placement of the skilled personnel. Under PMKVY 2.0, out of 9.14 million candidates who were said to have been trained, only 2.13 million were placed. The ongoing version, PMKVY 3.0, has an even poorer record. Of 400,000 who are said to have been trained, only 30,599 (8 percent) have been placed.
Either the training has made little difference to the skill set of the candidates, or the skill given is not in areas where there is employment demand — defeating the scheme's purpose. The ministry, however, has, in its report on impact assessment, stated that there had been a 15 percent increase in the mean monthly income of the trained candidates.
The Committee has not been too impressed with the ministry’s assessment. It has observed that the very purpose of imparting training and certifying the candidates is defeated when placement statistics are abysmally low. Similarly, the report observes that 'gross underutilisation of funds' undermines the intent of such an important scheme. It adds, "needless to say, the ministry ought to pay serious attention towards addressing the impediments to leverage the placement/self-employment of the trained/certified candidates to a sizeable extent as well as to maximise utilisation of the earmarked funds".
The Committee has also commented on the high percentage of dropouts —nearly 20 percent dropped out after starting the training initially. The reasons ranged from the distance of the training centres from the residential areas to the lack of accessibility to jobs.
The Committee has also adversely commented on the training programme not aligning with industry requirements. This is a serious flaw and needs to be addressed urgently. We already have far too many graduates and postgraduates passing out every year from our universities — more than 70 lakhs on average every year.
The Committee also observed serious issues with the Centrally Sponsored State Managed component delay in releasing the funds from the state treasury, non-availability of trainers, and limited placement partners due to limited industrialisation that had plagued the scheme.
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The report is significant in the context of the growing unemployment numbers in India. As of November 20, as per CMIE, the unemployment rate was 7.59 percent, up from the September rate of 6.43 percent. (The unemployment rate is the percentage of people in the labour force who are unemployed, people who are willing to work but do not have a job). The unemployment rate was said to be 8.24 percent in urban areas and 7.28 percent in rural areas.
The PM had in October announced a drive to fill 10 lakh jobs. Appointment letters were given to 75,000 newly inducted appointees to mark 75 years of Independence.
The PM highlighted the importance of skilling India's youth for a brighter future. “Today, we are emphasising the most on skill development of youth. Under the Pradhan Mantri Kaushal Vikas Yojana, a huge campaign is going on to train the youth according to the needs of the country's industries,” he said. The PM informed that 12.5 million young people had been trained under Skill India Abhiyan. The Parliamentary Committee’s report would suggest that the work to translate the training into employable jobs is still some distance away.
— Najib Shah is a former chairman of the Central Board of Indirect Taxes & Customs. The views expressed in this article are his own.
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