The low certification percentage and weak placements are prompting the government to introduce substantial tweaks in the next version of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), or PMKVY 5.0, where it’s looking at incentivising employers for hiring PMKVY-certified candidates to boost the placement scenario. Additionally, the government is going to take outcome-led approach that entails keeping a track of the post training and placement records, and aligning these metrics to the scheme funding. The new approach will be different from that of the previous versions where the emphasis was given on higher enrolments as against the final outcome.
“This is a big shift from the previous stance when the focus was on providing training to a large number of candidates. Going forward, the scheme’s success will be measured through parameters such as completion rates, certification quality, and most importantly, placement outcomes in employment or apprenticeships. We are also looking at integrating employer incentives for hiring PMKVY-certified candidates to strengthen demand-side participation,” the official said.
Over the past three financial years, candidates securing certificates after completing their training under PMKVY 4.0 remains abysmally low at about 16% as a percentage to the government’s enrolment targets (see chart). Out of 12 million training target set for three years through FY26, only 1.9 million candidates could secure certificates after finishing the training.
From Inputs to Outcomes
To ensure strong employment outcomes, the official said that the funding model of the scheme will also be revised wherein a differentiated funding approach will be followed under which the government will fund the skilling component, including mobilisation, trainers, and assessments, while the industry will take ownership of on-the-job (OJT) training, infrastructure, and stipends.
PMKVY 4.0, which is the flagship scheme of the Ministry of Skill Development and Entrepreneurship (MSDE), primarily followed an input-led funding model where training providers are supported based on enrolment, training delivery, and certification milestones. “Even though this approach this approach helped scale the programme, it did not ensure strong alignment with employment outcomes. A co-investment model involving both the government and the industry will improve both relevance and sustainability,” he said.
Bridging the Gap
Even as the guidelines for PMKVY 4.0 are still being drafted, the official said that fifth edition of the scheme will formally integrate skills with higher education by mandating a minimum 30% skill component within degree and diploma programmes. Despite some steps being taken under PMKVY 4.0 to link skilling with education, they continue to operate in silos.
Further, the government will likely introduce two-pronged model where academic institutions will deliver skill credits through labs and internships, and industry delivering a significant portion of learning happens through OJT training. “This blended approach will make vocational education more aspirational, and create multiple entry and exit pathways,” the official said.
Experts said that the proposed changes can make the scheme more responsive, and closely aligned with evolving workforce needs. “These changes can help PMKVY evolve into an ecosystem that improves employability at scale and creates sustainable career pathways for India’s youth,” said Nipun Sharma, CEO of TeamLease Degree Apprenticeship.
The PMKVY 5.0 is likely to be introduced by mid-2026 since current version of PMKVY 4.0 ended in March 2026. The draft guidelines were sent to the PM office recently which has suggested some changes to the ministry.