New Delhi: A government-appointed panel has found that the first iteration of the Narendra Modi government’s flagship skilling scheme – the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) – spent over Rs 1,500 crore in skilling over 18 lakh people but failed to achieve key objectives such as high rates of job placement.

In the process, the report and industry officials say, the PMKVY scheme inadvertently followed in the footsteps of flawed UPA government initiatives that promised free vocational training but ended up enriching the pockets of private vocational education institutions.

The findings of the government panel – which was headed by Sharda Prasad, former head of the Directorate General of Education & Training – raise questions over the efficacy of government-subsidised skilling programmes and the role played by the National Skill Development Corporation (NSDC) and India’s Sector Skill Councils (SSC), the latter of which is a group of industry-governed and industry-run bodies which played a crucial part in implementing the PMKVY programme.

“Their [SSC] entire focus seems to have been on implementation of the PMKVY without regard to whether it will really meet the exact skill needs of the sectoral industry or turn out skilled manpower of global standards or persons that would get placed after the training,” says the report.

More damningly, the Prasad committee goes on to suggest that the flagship government skilling programme was carried out to ensure the financial stability of the various sector skill councils and in the process monetarily benefiting the private vocational education sector.

“The entire effort seems to make the SSCs financially strong by way of different mechanisms ….but in the process, there was a compromise on quality and basic objectives of their creation at every stage,” the report, which was submitted to the government last December but only recently made available for public comments, states.

What happened?

On July 15, 2015, Modi got up on stage at New Delhi’s Vigyan Bhawan to launch his ‘Skill India’ campaign and, in the process, set a number of daunting goals. A National Skill Development Mission was launched, with a new National Policy for Skill Development and Entrepreneurship.

The “demand-driven, reward-based” PMKVY flagship scheme was set up with a promise to train over two million people in one year – the NSDC had in 2014-15 trained 1.3 million people. The UPA government’s modest goal of skilling 150 million people by 2022 was raised to a much loftier target of 400 million people by 2022.

A budget of Rs 1,500 crore was allotted for the first phase of the PMKVY initiative. This money would trickle down from the government to the National Skill Development Corporation (NSDC – a public-private partnership that catalyses the creation of for-profit vocational institutions and serves as a funding channel – to India’s 40-something Skill Sector Councils (SSCs) and the sprawling ecosystem of vocational training providers and institutes.

The SSCs occupy a unique position within India’s skilling ecosystem: they are autonomous industry-led bodies that conduct skill-gap studies, develop the curriculum for the vocational training institutes (through the creation of ‘National Occupational Standards’), sometimes train the trainer academies and then crucially assess and certify trainees who have been skilled.

“Under subsidised government skilling, the money flows through this triad: the NSDC, the SSCs who carry out assessment and certification, and then to reimburse the actual vocational training providers or VTPs for their services. From here, the NSDC was then given its marching orders,” a source familiar with the Prasad committee’s investigation told The Wire.

The committee’s findings point out that over the last few years the NSDC has “assigned targets to the SSCs and asked them to empanel vocational training providers and assessing bodies to carry out training and assessment and earn revenue for themselves in the process”.

As a number of industry officials told The Wire that making sure India’s SSCs become financially sustainable is a crucial part of ensuring that India’s skilling ecosystem becomes as effective as possible.

Where things went wrong, as the Prasad committee notes, is that the huge targets of past and present government-subsidised skilling projects create a system that is not demand-driven in terms of the skills needed by their respective industry nor is it high-quality education that is likely to land them a job.

“The SSCs proposed huge physical targets of training trainees, their certification, training of trainers, training of assessors and affiliation of training institutions on arbitrary basis without any regard to what exact skill needs of sectoral employers were and this was agreed to by the NSDC. The term sheets were signed accordingly. The financial assistance to the SSCs was linked to the achievement of these targets. In fact, many of the SSCs told the Committee during consultations that these high targets were assigned by the NSDC arbitrarily and they were asked to sign on the dotted lines to claim funding from the NSDC,” the panel’s report says.

The end result? The committee notes: “Most of the SSCs in their quest to achieve the targets, compromised in quality of training, assessment and certification leading to the current situation of mess”.

This happened through various ways and means: the NSDC and SSCs allegedly made a “mockery of trainers training by giving fresh diploma and engineering graduates 2-5 days of training to become a qualified trainer”. Some part of the PMKVY’s less-than-optimal outcomes can be also be traced to the Modi government’s 2015 skilling policy which differed from the 2009 policy in including “skill-based assessment and certification for QP/NOS-aligned training programmes” under the mandate of India’s SSCs.

In simple words: SSC’s created the curriculum, sometimes trained the trainers and were allowed to make money by assessing and certifying the student.

“While it might appear that it [the 2015 policy] helps SSCs sustain financially, it has also created an anomalous situation where there has been grave compromise in quality of assessments in order to earn maximum revenue out of assessment and certification. In order to maximize their revenue, the SSCs tried to carry out maximum number of assessments and certification without regard to quality and whether they[the students] have acquired relevant competencies or not. The result was that sectoral industries themselves refused to employ…,” the committee notes.

PMKVY poor placement?

The Prasad panel lumps the PMKVY scheme in with past UPA government initiatives such as the STAR scheme (carried out in 2013).

“As we have seen, out of 18.03 lakh persons trained under PMKVY in 2015-16, only 12.4% persons were placed. Similarly, under the STAR scheme, out of 14.15 lakh persons trained and certified in 2014-15 only 8.5% persons were placed. Government of India provided Rs 1000 crore under STAR and Rs 1500 crore under PMKVY.”

The panel’s assessment of how badly government-subsidised skilling programmes went wrong is scathing: “The unmistaken conclusion is that…an amount of Rs. 2500 crore of public funds was spent to benefit the private sector without serving the twin purposes of meeting the exact skill needs of the industry and providing employment to youth at decent wages”.

The committee’s voluminous report places poor placements at the doorstep of a number of issues: the targets given and proposed by the SSCs and the NSDCs and the system of assessment and certification.

Too short courses

It also slams the national occupation standards or skilling curriculum developed by India’s SSCs and what was taught by thousands of vocational training institutions under the PMKVY scheme.

According to several sources, a majority of the courses taught under the PMKVY were between 100-300 hours duration – which translates to, on average, a 3-month course.

The panel’s findings also point their finger in this direction by pointing out that the NOSs developed by India’s SSCs “do not meet the real industry needs as a result of which the trained persons have not been employed by the sectoral industries”.

“You are basically taking a half-educated person (10th standard pass) and giving him a quarter education under the PMKVY. What kind of outcomes do you expect based off of this?,” an education official, who declined to be identified, told The Wire.

Government response

It is not yet certain to what extent the central government will accept the recommendations and findings of the Sharda committee. However, government officials, who The Wire reached out to, offered a number of defenses but declined to be identified as they were not authorised to speak to the media.

“Initially, in the first year, it was not mandatory for training institutions to keep track of placements. This has now been changed to bring in greater accountability. The number of placements with subsidised government skilling programmes such as PMKVY is also higher at 20%, not 12% as the report suggests,” one government official said.

Another issue, that is not addressed by the Prasad panel, but came up in conversations with NSDC officials, is the question of free, reward-based skilling versus fee-based skilling programmes.

“Fee-based vocational training has better outcomes, in terms of the courses chosen and placement as well. People who pay for their skilling are also more likely to take it seriously, whereas with programmes like PMKVY you see a certain amount of drop-outs even though there is a small monetary reward if they complete the course,” a senior government official, who declined to be identified, said.

In addition to this, the NSDC has, in the last six months, has tried to address some of the more serious concerns with regard to quality assessment and certification with the second phase of the PMKVY programme. Some of this comes with better training of trainers, while other initiatives such are aimed at reducing fraud within the system through Aadhaar-based and biometric enrolment.

Broader restructuring

The NSDC has had a rocky past: A Comptroller and Auditor general report that examined the workings of the public-private partnership from 2008-2014 pointed towards a “host of irregularities which played a determining role in the painfully slow place at which skilling India has progressed”.

This report laid bare fundamental issues with the NSDC and SSC’s workings – little regulatory oversight, poor reviewing and pitiful financial contribution from the private sector – and reportedly led to the exits of NSDC heads and UPA-appointees Dilip Chenoy and Atul Bhatnagar.

Many of these issues still exist: as the Prasad committee notes, while 51% of NSDC’s shareholding lies with the private sector, nearly 100% of its funding still comes from the government. In addition to that, there exist a not-insignificant number of conflict of interests amongst the various skill sector councils. The government panel goes as far as to call them a “hotbed of crony capitalism”, with many SSCs trying to “extract maximum benefit” from public funds.

The report also calls for a shake-up and consolidation of India’s SSCs: more specifically, rationalising the currently existing 40 councils into a more manageable 20. Will the government take action? As the public comment process winds up, the skill development ministry’s future course of action will be known over the next few months.