House Committee cites CAG report, pulls up govt. over skilling programme

Have enough grounded facts (CAG Report No. 20 of 2025, PRS summary, PIB, article). Writing the note.

1. At a Glance

• Parliament's Public Accounts Committee (PAC), chaired by K.C. Venugopal, examined the CAG's Performance Audit of Skill Development under PMKVY and flagged a severe skills-demand mismatch. [S4]
• Tests both static scheme knowledge (PMKVY architecture, ministry, phases) and dynamic parliamentary-oversight mechanics (CAG–PAC audit-accountability loop) — a recurring UPSC theme (Art. 148, 151; DPC Act 1971). [S1]
• Core finding: skilling capacity was directed at low-demand trades (retail, apparel, electronics — 40% of trainees) while high-demand sectors like food processing (0.48%) and tourism (3.8%) were neglected. [S6]
• Only 41% of certified trainees were placed in jobs, despite the scheme running since 2015. [S1][S3]

2. Why in the News

• June 4, 2026: PAC held oral evidence with the Ministry of Skill Development and Entrepreneurship (MSDE), examining CAG Report No. 20 of 2025 ("Performance Audit of Skill Development under PMKVY"). [S4]
• Reported by The Hindu on June 5, 2026, noting cross-party (Congress and BJP) MPs criticised the government's lack of planning despite the scheme's decade-long existence, and cited recurring fraudulent training certificates. [S6]

3. Background & Evolution

• PMKVY launched July 2015 by MSDE as the flagship short-term skilling scheme, to certify youth in industry-relevant skills and link training to employability, aligned with the National Skill Development Policy. [S6]
• Implemented in three phases (2015–2022) with a cumulative outlay of approximately ₹14,450 crore. [S3]
• Executing agency on the ground: National Skill Development Corporation (NSDC), with State Skill Development Missions as implementation partners. [S3]
• CAG conducted audit across MSDE, NSDC, and 8 states: Assam, Bihar, Jharkhand, Kerala, Maharashtra, Odisha, Rajasthan, Uttar Pradesh. [S3]
• CAG's Report No. 20 of 2025 tabled in Parliament (December 18, 2025); PRS India published a summary in January 2026. [S1]

4. Core Static Facts

5. Multi-Dimensional Analysis

Economic - Skewed training toward saturated/low-value trades (retail, apparel) wastes public expenditure without generating matching employment absorption. [S6] - Nearly one-fifth of allocated state funds lay unutilised — indicating both planning and disbursement bottlenecks. [S1]

Social - Only 41% placement means a majority of certified (often first-generation, economically weaker) trainees gained no tangible employment outcome — undermines the "demographic dividend" narrative. [S1][S6] - Delayed/unpaid stipends (₹500 payout pending for ~36% of candidates due to bank-account data gaps) disproportionately hurts low-income beneficiaries. [S1]

Ethical/Governance - Recurrent fraudulent placement/appointment letters point to weak verification and monitoring by training partners. [S6] - Low Aadhaar-based attendance compliance (13%) signals systemic monitoring failure enabling ghost enrolments. [S1]

Administrative - Absence of skill-gap analysis before selecting job roles across all three phases — a decade-old design flaw never corrected. [S1][S6] - Weak Centre-State convergence despite federal delivery structure (NSDC–State Skill Missions). [S1]

Legal/Constitutional - Demonstrates the CAG–PAC accountability chain: CAG audits under Art. 148/149 (DPC Act, 1971) → report laid under Art. 151 → examined by PAC (Art. 118, Rule of Procedure) for executive accountability to Parliament.

6. Recent Developments (last 12–18 months)

• December 18, 2025: CAG tabled Report No. 20 of 2025 on PMKVY performance audit. [S1][S3]
• January 2, 2026: PRS Legislative Research published a summary of the CAG report. [S1]
• June 4, 2026: PAC (headed by K.C. Venugopal) held oral evidence session with MSDE officials on the report. [S4]
• June 5, 2026: Media (The Hindu) reported PAC's criticism of skill-demand mismatch and poor placement outcomes. [S6]

7. Prelims Hooks

• PMKVY launched in July 2015 by the Ministry of Skill Development and Entrepreneurship.
• Nodal implementing agency: National Skill Development Corporation (NSDC).
• CAG audit report on PMKVY: Report No. 20 of 2025, tabled December 18, 2025.
• CAG audit covered PMKVY Phases I–III (2015–2022), outlay ~₹14,450 crore.
• Only 41% of the 56 lakh certified trainees were placed under STT/SP components.
• Apparel, electronics, and retail together accounted for 40% of trainees trained.
• Food processing sector: only 0.48% of trainees trained despite high demand.
• Tourism sector: only 3.8% of trainees skilled.
• ~20% of funds allocated to states (2016–24) remained unutilised as of March 2024.
• Only 13% of STT/SP batches (since 2018) complied with Aadhaar-based attendance requirement.
• The Public Accounts Committee (PAC) is chaired by K.C. Venugopal; it is a Parliamentary Financial Committee examining CAG reports.
• CAG's constitutional basis: Articles 148–151; statutory basis: CAG (DPC) Act, 1971.
• PAC comprises members from both Lok Sabha and Rajya Sabha; conventionally chaired by an Opposition MP.

8. Mains Relevance

• GS-II: Parliament and State Legislatures — structure, functioning, Parliamentary Committees (PAC); Government policies and interventions for skill development.
• GS-III: Human Resource Development, employment generation, inclusive growth.
• Sample question stems: 1. "Examine the role of the Public Accounts Committee in ensuring executive accountability, with reference to its recent scrutiny of the PMKVY scheme." (GS-II, 15 marks) 2. "Despite a decade of implementation, India's flagship skilling programme continues to face a demand-supply mismatch. Discuss the structural reasons and suggest reforms." (GS-III, 15 marks) 3. "Discuss the constitutional and statutory basis of CAG audits and their significance in strengthening parliamentary oversight of public expenditure." (GS-II, 10 marks)

9. Related Topics to Study Next

• Skill India Mission / National Policy for Skill Development — the umbrella framework PMKVY operates under.
• CAG of India (Art. 148–151, DPC Act 1971) — audit mandate, types of audits (performance, compliance).
• Parliamentary Financial Committees (PAC, Estimates Committee, Committee on Public Undertakings) — composition and powers.
• Skill Gap Analysis / Labour Bureau Reports — methodology for demand-based training planning.
• Demographic Dividend debate — links employment/skilling outcomes to India's working-age population advantage.
• Aadhaar-based governance systems — biometric attendance in welfare delivery, DBT linkage.
• NSDC and State Skill Development Missions — federal implementation architecture.

10. Common Errors / Trap Areas

• Confusing PMKVY with Skill India Mission (broader umbrella) or Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), which is under the Ministry of Rural Development, not MSDE.
• Wrongly attributing PMKVY to Ministry of Labour & Employment instead of MSDE.
• Mixing up PAC (examines CAG reports on expenditure) with the Estimates Committee (examines budgetary estimates/economy) — distinct mandates.
• Assuming CAG report findings are the same as PAC's report — the PAC's own report (with recommendations) is distinct from and follows the CAG's audit report.
• Misremembering the placement figure — it is 41% placement of certified trainees, not of all enrolled/registered candidates.

11. Sources

• [S1] Committee Reports / CAG Summary — PMKVY, PRS Legislative Research — https://prsindia.org/policy/report-summaries/skill-development-under-pm-kaushal-vikas-yojana — (tier: 1)
• [S3] CAG Report No. 20 of 2025 (Performance Audit — PMKVY) — https://cag.gov.in/uploads/download_audit_report/2025/Report-No.-20-of-2025_PA-PMKVY_English-PDF-A-06943abec463479.68516873.pdf — (tier: 1)
• [S4] Parliament Public Accounts Committee to examine recent CAG reports — https://www.indiasnews.net/news/279144002/parliament-public-accounts-committee-to-examine-recent-cag-reports-today — (tier: 4)
• [S6] "House Committee cites CAG report, pulls up govt. over skilling programme," The Hindu, June 5, 2026 — https://www.thehindu.com/todays-paper/2026-06-05/th_international/articleG26G2QD8E-14835353.ece — (tier: 4)