NSDC crackdown continues: Current, ex-staffers get notices for Pradhan Mantri Kaushal Vikas Yojana ‘lapses’

More than a year after it cut short the tenure of its CEO, and months after it filed a police complaint alleging that some of its top officials indulged in “misappropriation” of funds, the National Skill Development Corporation (NSDC) has cracked down on its own employees again.

In the latest move that point to systemic failures within the organisation, The Indian Express has learnt that NSDC, which implements Pradhan Mantri Kaushal Vikas Yojana (PMKVY), has sent show cause notices to around 20 serving and former employees over alleged irregularities flagged by the Comptroller & Auditor General (CAG) in the flagship skills training scheme.

The show cause notices, sent earlier this month, lists several “charges” against each of the staffers under scrutiny — including failure to match job role selection for candidates to market demand, verify accreditation and documents, or ensure Aadhaar attendance. The notices warn that the cases will be referred to investigating agencies if financial misconduct and criminal culpability are detected.

The NSDC implements PMKVY on behalf of the Ministry of Skill Development and Entrepreneurship (MSDE). PMKVY was launched in 2015 and has imparted skills training to over 1.64 crore youth till June 2025.

The CAG has audited three phases of PMKVY from 2015 to 2022, covering an outlay of Rs 14,450 crore and a combined target of training and certifying 1.32 crore candidates — the latest phase of the scheme PMKVY 4.0 is ongoing.

The audit flagged multiple irregularities, including fake bank account numbers linked to beneficiaries, duplication of identification details across candidates, and non-payment to training partners for 34 lakh candidates.

In its 94-page report, which was tabled in Parliament in December 2025, the CAG also found that coordination between Central and State departments was “not effective” and described NSDC’s monitoring mechanisms as “unreliable”. It cited “poor monitoring and oversight” by the Ministry and highlighted deficiencies in the inspection of skill centres, including non-functional biometric attendance devices. Following the report, the Ministry had stated that the audit had “significantly strengthened” the scheme.

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In some of the latest show cause notices, signed by the head of NSDC’s legal department, employees have been given 15 days to reply to specific “charges”, with failure to do so construed as “admission of the charges”.

The Indian Express reviewed some notices, which were sent over registered post. They list specific lapses allegedly committed by each recipient, described as “gross negligence of duty” and “willful non-compliance” with guidelines of PMKVY 2.0, the second phase of the scheme introduced in December 2017.

Responding to a request for comment from The Indian Express, NSDC CEO Arunkumar Pillai stated, “NSDC has taken note of the CAG observations and, under its new leadership, has initiated due course-corrective and accountability measures as PMKVY’s implementation agency.”

Pillai said, “Show cause notices have been issued as per applicable contractual/service terms, internal governance processes and legal provisions. Since the matter is under due process, comments on individual cases, proposed action, or further notices would be premature.”

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He said that “any action will be based on examination of replies, records, and principles of natural justice”.

Several recipients of the notices, speaking on condition of anonymity, denied the charges. One former staffer claimed to have left NSDC in 2016, before the guidelines for PMKVY 2.0 were drafted. “We fail to understand under what legal provisions or clauses such notices have been sent to former employees who left NSDC long ago,” the former staffer said. Another former employee, who received the notice, described it as “nothing but harassment”.

The key charges listed in the notices are:

* Failure to ensure job role selection was based on skill-gap analysis and assessment of market demands which, the CAG identified, was the primary reason for low placements.

* Failure to verify accreditation status of Training Centres before approving RPL-BICE (Recognition of Prior Learning-Best in Class Employer), resulting in trainings being conducted in non-compliant centres.

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* Failure to verify authenticity of documents before approving RPL-BICE payments, thus allowing “fabricated” evidence to pass scrutiny.

* Failure to ensure data integrity, resulting in “catastrophic” data integrity compromise on Skill India Portal.

* Failure to enforce geotagging requirements and to verify inspector visit logs, allowing “fraudulent” inspection reports to be accepted.

* Failure to enforce Aadhaar-based Attendance for batches to be trained, resulting in attendance data being “compromised.”

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Besides, those associated with PMKVY 2.0 have been accused in the CAG report of several other lapses related to scrutiny of proposals, verification of employer eligibility criteria, clearance of outstanding payments to Skill Sector Councils and verification of candidate eligibility.

In May 2025, the NSDC cut short the tenure of its then CEO, Ved Mani Tewari. The abrupt removal was communicated through an unusual public notice stating that Tewari was no longer associated with NSDC. The notice also informed stakeholders that, until a new CEO was appointed, a committee of senior NSDC officials would oversee the organisation.

The Indian Express reported on September 22, 2025, that the Ministry had filed a complaint with the Delhi Police on August 1, 2025, over alleged “misappropriation at NSDC”. The officials named in the complaint were part of the high-powered committee tasked with steering NSDC after the CEO’s removal.