CAG Report on India’s Skill Development
CAG Report on India’s Skill Development
Context
In December 2025, the Comptroller and Auditor General (CAG) of India tabled a scathing performance audit in Parliament. The report (No. 20 of 2025) focused on the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), exposing systemic lapses in India’s flagship initiative to capitalize on its "demographic dividend."
About the News
The audit covered the implementation of PMKVY across its first three phases (2015–2022), revealing a significant chasm between government claims and ground realities.
Key Audit Findings:
- Data Integrity & "Ghost" Beneficiaries:
- Over 94% of candidate records (affecting 90.66 lakh people) had missing or invalid bank details (e.g., placeholders like "0000" or "123456").
- Widespread use of fictitious email IDs (e.g., "abcd@gmail.com") and duplicated photographs to claim training funds for different batches across multiple states.
- Financial Mismanagement:
- Approximately 20% of funds allocated to state components remained unutilized as of March 2024.
- Direct Benefit Transfer (DBT) failures: While ₹500 was promised to every certified candidate, payments were successfully credited to only 18.4% of participants.
- Infrastructure Lapses:
- Physical inspections found many training centers closed or non-existent, despite records showing ongoing training sessions.
- Only 13% of training batches complied with the mandatory Aadhaar-based attendance system.
Economic Foundation: The "Missing Middle"
India’s economic trajectory remains unique but precarious compared to peers like China.
- Skipping Manufacturing: While China established itself as the "world's factory" (Secondary Sector) before moving to services, India transitioned directly from Agriculture to Services.
- Structural Weakness: Without a robust manufacturing base, there is a limited "absorptive capacity" for semi-skilled labor, leading to high unemployment among the youth despite having degrees.
Education-Industry Disconnect
The National Education Policy (NEP) 2020 set ambitious targets to bridge the skill gap, yet the implementation remains sluggish.
|
Metric |
Target (NEP 2020) |
Current Status (Approx. 2025) |
Global Peers (Germany/China) |
|
Vocational Exposure |
50% of learners by 2025 |
~1.3% to 4.4% |
50% to 75% |
|
Curriculum Alignment |
Integration from Grade 6 |
Largely restricted to Grades 11-12 |
Deeply integrated in secondary school |
Challenges in Vocational Training:
- Technical Mismatch: In roles requiring technical expertise, the CAG found that 85% of certified candidates possessed only basic literacy.
- Certification vs. Competence: The system remains "certification-heavy" but "outcome-light," with a placement rate of only 41% for certified candidates.
Way Forward
The CAG and policy experts suggest a radical shift in the skilling architecture:
- Outcome-Based Funding: Payments to training partners should be strictly linked to verified long-term employment rather than just enrollment or certification.
- UDISE Integration: Expediting the merger of the Unified District Information System for Education (UDISE) with the Skill India Portal to prevent ghost enrollments.
- Industry-Led Training: Shifting the focus to On-the-Job Training (OJT) and apprenticeships (NAPS) rather than classroom-only vocational modules.
- Transparency: Implementing geo-tagged, time-stamped evidence for all training sessions to eliminate the use of fraudulent records.
Conclusion
The CAG report serves as a wake-up call that "Skill India" cannot succeed on digital dashboards alone. To avoid the demographic dividend turning into a demographic disaster, India must move beyond "skilling for certificates" and focus on "skilling for the market."