Can the PMKVY Help India Become a Leader in Emerging Industries?

India, with a population of over 1.3 billion and a strong education system, has the potential to become a leader in emerging industries such as e-commerce and space travel. However, in order to do so, the country must focus on acquiring the necessary skills and knowledge. This is where the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) comes into play.

PMKVY is a flagship programme of the Ministry for Skill Development and Entrepreneurship (MSDE), launched in 2015. The programme encourages and promotes skill development in the country by providing free, short-term skill training and financially rewarding youth who obtain skill certification. Applicants with prior experience or skills are assessed and certified under the Recognition of Prior Learning (RPC) programme.

New-age courses for Industry 4.0

FM Nirmala Sitharaman recently announced phase-4 of PMKVY in the 2023-24 Union Budget, with a focus on on-the-job training, industry collaboration, and course alignment with industry demands. The programme includes new-age courses for Industry 4.0, such as coding, AI, robotics, mechatronics, IoT, 3D printing, drones, and soft skills. Additionally, six working groups have been established to make recommendations on key budget announcements such as PMKVY, Skill India International Centers, National Apprenticeship Promotions Scheme, and others.

MSDE works with state governments and federal ministries to ensure that National Skills Qualification Framework (NSQF) certification is recognized as a condition for recruiting contractual personnel. It also intends to make hiring NSQF-certified professionals a regulatory requirement for contractors and vendors.

Training providers are paid in three installments: 30% upon the start of training batches, 30% following the placement verification, and 40% upon successful certification. Other benefits, such as post-placement assistance, boarding and accommodation, transportation, and other support, are based on Common Cost Norms. NSDC's dedicated research unit continually matches demand and supply while also strengthening the Atma Nirbhar Skilled Employee-Employer Mapping (ASEEM) portal.

The vocational courses have also been provided to schools in a phased manner. This component, which is implemented in grades 9 through 12, attempts to expose youngsters to skill development possibilities for vocational training jobs.

The Pradhan Mantri Kaushal Vikas Yojana presents candidates with a Skill India card and a recognized certification, allowing them to enroll in various occupations and make a living. These qualified individuals also receive financial and placement aid under the initiative.

PMKVY supports India's economic growth by offering jobless youth and college or school dropouts industry-based skills training that prepares them for employment. The government's data indicates that 57% of applicants were placed under PMKVY 2016–20. Furthermore, the independent third-party impact evaluation of PMKVY 2016–20 found that 17% of the students enrolled in the program would rather pursue higher education than find employment.

While the scheme has achieved some success, challenges remain in its implementation. The underutilization of funds is one such issue. Only Rs 1,043 (72%) crore of the allocated Rs 1,438 crore under PMKVY 3.0 in 2021–2022 were used. Additionally, the Committee noted that COVID-19 restrictions caused a drop in enrollment and certifications, resulting in low disbursement and insufficient funds for new batches.

The Committee also observed that placement statistics are the real barometer for evaluating the scheme. Under PMKVY 2.0, out of 91.4 lakh candidates, only 21.3 lakh candidates were placed (23%).

Underutilization of funds

Despite the revisions made to the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme, its implementation still faces several challenges. One major issue is the underutilization of funds, with only 72% of the allocated budget for PMKVY 3.0 being used in the 2021-2022 fiscal year. This problem was exacerbated by the COVID-19 pandemic, which caused a drop in enrollment and certifications, resulting in a low disbursement and insufficient use of funds for new batches.

Another significant challenge is the low placement rate of candidates. Only 23% of candidates were placed under PMKVY 2.0; under PMKVY 3.0, the placement rate was only 8%. The high dropout rate of around 20% of enrolled candidates across all iterations of the program is also a challenge. Dropouts occurred for various reasons, including medical issues, distance from training facilities, difficulty finding employment, and personal reasons such as pregnancy and marriage.

While the Ministry may not have control over all these factors, there is a need for interventions to reduce dropout rates. The accessibility of training facilities and job opportunities could be improved to address these issues. Despite these challenges, PMKVY has had some achievements, with 57% of applicants being placed under the scheme from 2016-2020. An independent third-party evaluation found that 17% of students enrolled in the program opted for higher education over employment. The Ministry also encourages increased industry involvement in the skilling ecosystem and promotes employer-led skill development to improve placement rates.