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Tracking Reforms & Policy

Pradhan Mantri Kaushal Vikas Yojana

Prepared for: Prof. Amitabh Pandey

Prepared by: Anshul Gupta (16007), Julie Bania (16025)
3 August 2017
India is amongst the fastest-growing economies in the world in the last decade with a youth
population of 356 million aged between 10- 24 yrs. It is said that developing countries with large
youth populations can increase their economies , provided they invest heavily in young peoples
education and health and protect their rights. Young people are the innovators, creators, builders
and leaders of the future. However all these parameters in the youth can help transform the
future only with the ability of skills, health, decision making and real choices in life. Despite the
above facts Indias emerging workforce is unable to cope with the demands of a 21st-century

One of the key reason was the unskilled labour.

Skill development and entrepreneurship eorts across the country have been highly fragmented
so far. As opposed to developed countries, where the percentage of skilled workforce is
between 60% and 90% of the total workforce, India records an abysmal 4.69% of workforce
with formal vocational skills. There is a need for speedy reorganisation of the ecosystem of skill
development and entrepreneurship promotion in the country to suit the needs of the industry
and enable decent quality of life to its population.

It is not that skill and training have been given high priority by the government for the first time
under the current regime. Underlining the importance of skill development and vocational
education, the 12th Five Year Plan (FYP) document informs us that while falling labour force is a
major concern in most industrialised countries and also China, India has the benefit of a
demographic dividend because the age structure of the population ensures that the labour force
will be growing.

The 12th FYP, which was prepared under the United Progressive Alliance in its second term
(UPA-2), emphasises the need to connect the Skill Development Mission with market demand.
The document mentions that in order to ensure that skills match demand, employers and
enterprises must play a vital role to play in the conception and implementation of vocational
training programmes, including managing Industrial Training Institutes (ITIs) and in the
development of faculty.

The plan says that skill development programmes should have backward linkages with school
programmes and forward linkages with industry and other service sectors who can be potential
employers of skilled manpower. It urges enhancing access to higher education by creating two
million additional seats for each age cohort aligned to the skill needs of the economy.

However, the 12th FYP embarked on a relatively modest target of skilling 80 million people until
2019, which leaves around 400 million people to be trained in the 13th FYP by 2022, according
to the 4th Annual Employment-Unemployment Survey Report 2013-14 of the Labour Bureau.


To increase the number of skilled labour so that the unemployed could grab some employment
opportunities Prime Minister Narendra Modi launched the Skill India Campaign. The Pradhan
Mantri Kaushal Vikas Yojana is a flagship event under the Ministry of Skill Development &
Entrepreneurship (MSDE) and the Union Cabinet on 20th of March,2015 approved it with an
outlay of Rs. 1500 crore for the first phase of PMKVY initiative to provide skills and training to
the unemployed as well school drop outs in order to increase their livelihoods.

Objective of PMKVY:
Increase the employability of India's youth

Alleviating households below poverty line

Empowering the future generations so that they can shape their own future

Reach out to rural India to help them be self- sustainable

Bridging skilled labour gap for the industry


Sort term training- Providing 60 lakh youth with the opportunity to get trained, assessed and

Recognition of prior learning- Aligning the competencies of 40 lakh individuals from the
unregulated workforce with the National Skill Qualification Framework(NSQF)

Special projects- Enable a platform that will facilitate trainings in special areas and premises
of government bodies and corporates.

Kaushal and Rozgar Mela- Organised every six months by training partners to ensure
trainings reach far and wide.

Placement assistance- Linking the knowledge and potential of the students to potential

Continuous monitoring- using technology based methodologies to ensure high standards of

quality maintained by the training centres

Standardized branding and communication- Ensure greater visibility and accurate

communication of the scheme on ground.

Reward based scheme

Public-Private partnership


The scheme is implemented by MSDE through National Skill Development Council( NSDC). The
Sector Skill Council(SSC) of India plays an important role in the implementation of the scheme.
The vocational trainings are meant to be provided by the vocational training centres which are
funded by the NSDC. The curriculum for the trainings are designed by the SSC ( autonomous
industry led bodies) which conduct the skill gap study in our country, They are also responsible
for training the trainers, assessment and the certification of the trainees who have been skilled.
The focus under the scheme is on placement facilitation. The UPA government targeted a
decent goal of skilling 150 million by the year 2022, however, the NDA government raised the
target to 400 million by 2022.

Allocated budget of MSDE for the year 2016-17, 2017-18; Source: Annual Report MSDE

Role of all the stakeholders under PMKVY; Source: Guidelines PMKVY, 2016

Source: PMKVY Guidelines 2016

1. Success of the Scheme:
As overall success is not calculated merely by numbers, but also through key policy
interventions and reforms introduces to up-scale Indias skill ecosystem.The Ministry of Skill
Development and Entrepreneurship has trained more than 1.17 crore aspirants in various skills
through MSDE schemes and programmes since the inception of Skill India. It is a silent
revolution that is underway and is a joint investment that the government along with the private
partners, is making for the countrys growth. It is a path that needs to be travelled very carefully
since it involves the future of our youth. Under the Pradhan Mantri Kaushal Vikas Yojana
(PMKVY) 26.5 lakh people have got trained in skills of their choice till date, of which 50 per cent
are women candidates.

Benefits to Candidates
Free Cost Training to eligible candidates

Skill Certificate to eligible candidates

Placement assistance in case of Short Term Training

INR 500 is applicable for all certified candidates

Conveyance Fee for all eligible candidates

2. Failures of the Scheme:

Placement: One of the key failure of the scheme is poor placement. It has not been able to
achieve its target of high rate of job placement. Out of 18.03 lakh persons trained under
PMKVY in 2015-16, only 12.4% persons were placed. This was mainly due to the fact that the
public fund was benefitted to the private sector while less focus was emphasized on the type
of training required.

Courses: According to several studies and sources the curriculum designed by the SSC for
trainings on various skills are on an average 3 months. This period of training is insucient to
meet the demand of the standards in the real industry as it seems to be too short for those
people who are just 10th passed or drop outs.

Quality of training and assessment: The financial assistance to the SSCs were linked with
the achievement of targets such as training of trainers, training of assessors, aliation of
training institutes, certification of trainees etc. So in order to achieve their targets they
compromise in the quality and on arbitrary basis without analysing which skills are in actual
demand in the sectoral employers.

3. Other Loopholes:
Unequal distribution of Training Centres & problem of Ghost Training Centres

From the above figure it can be seen that the highest number of training centres are restricted to
only 5 major states. From studies it has been found out that there is an increase number of fake
centres or rather ghost trainees in the states of UP, Rajasthan and Haryana. Few centres
outsource training to third parties which is strictly against PMKVY. The centres can outsource
only for land, building and equipment purposes.

Consolidation of Sectors:

Currently there are existing 40 dierent sectors for skills under the SSC. However from the below
table it can be seen that the top three sectors focussed are electronics sector; Apparel,Makeup
and Home furnishing sector and the Retailer sector. The trainings in the courses of the rest of the
sectors like Handicrafts, Domestic workers etc are very few compared to others which have high
potential of employment opportunities. So instead of 40 sectors the SSC can consolidate into 20
manageable sectors and focus on it.

The reach of the scheme and training centres are far behind in many states of the
From the below table we can analyse that the even though the scheme was launched in the year
2015, at present after two year it has still not reached to many regions of the country specially
the north east region although extra amount of fund was allotted specially for this region.


4. Psychological barriers:
Public perception that views skilling as the last option meant for those who have not been able
to progress/ opted out of the formal academic system.

5. Administrative Challenges
Skill development programmes of the Central Government are spread across more than 18
Ministries/ Departments without any robust coordination and monitoring mechanism to ensure

Multiplicity in assessment and certification systems that leads to inconsistent outcomes and
causes confusion among the employers

Paucity of trainers, inability to attract practitioners from industry as faculty

Mismatch between demand and supply at the sectoral and spatial levels

Limited mobility between skill and higher education programs and vocational education

Very low coverage, poorly designed apprenticeship programs devoid of industry linkages

Narrow and often obsolete skill curricula

Declining labour force participation rate of women

Pre-dominant non-farm, unorganised sector employment with low productivity but no

premium for skilling

Non- inclusion of entrepreneurship in formal education system

Lack of mentorship and adequate access to finance for startups

Inadequate impetus to innovation driven entrepreneurship


PMKVY will have to achieve much more than what it could so far. Most important being, taking
advantage of the demographic dividend, which is both the biggest opportunity and the
biggest concern for the country. With only 2.3 per cent of the total workforce in India having
undergone formal skill training as compared to 68 per cent in the UK and 52 per cent in the US,
the quantum of the challenge is still high.

Industry experts say public perception on skilling and vocational training is still low. Skilling is
perceived as the last resort meant for those who have not been able to progress in the formal
academic system. This mental block has only increased the gap between what the industry
requires and what is currently available, said the chief executive of an education technology
firm involved in skill training.

Another concern would be to ensure that ground level implementation of skill policies happen at
the same speed at which the youth are coming into the workforce.

With new policies on skill development being put in place, the re-skilling and up-skilling
initiatives are expected to put up pace. The objective of the National Policy on Skill Development
and Entrepreneurship, 2015 will be to meet the challenge of skilling at scale with speed and
standard (quality). It will aim to provide an umbrella framework to all skilling activities being
carried out within the country, to align them to common standards and link the skilling with
demand centres.

Challenges for the skill training segment will have to be addressed one, aligning student
aspirations with industry expectations on salaries and job roles; two, convincing employers to
hire the skilled force rather than looking for a cheaper resource, this when the primary challenge
faced by over 75 per cent of Indian businesses is the shortage of technical or specific skills.

The industry says in any situation there is natural attrition. NSDC would have to look at providing
job opportunity across. Jobs have to be found where the skilling takes place. Industry players
say skilling will also have to go beyond the token corporate social responsibility initiatives that
companies take up.

On the demand side, a skill gap study has been conducted by NSDC in 2014, which indicates
that there is an additional net requirement of 119.2 million skilled manpower in 24 key sectors by
2022. It is observed that today the total workforce in the country is estimated at 487.4 million, of
which approximately 51 per cent is in the non-farm sector.

The biggest challenge is availability of good quality trained trainers. There are more than 10,000
ITIs in the country, employing large numbers of trainers but their knowledge and skills do not
match industry requirements of today.

There is an enormous gap between the skills needed by the industry and what academia is
producing, resulting in a deep fracture in the talent supply chain.

As government ocials also agree, apart from mere fund allocations from the private sector,
proper handholding from private sector is what will boost the new phase of skilling. Be it from
the training perspective or from job opportunity perspective.


Annual Report: MSDE

PMKVY Guidelines