In a sharp crackdown on internal irregularities, the National Skill Development Corporation (NSDC) has issued show-cause notices to around 20 serving and former employees over alleged lapses flagged by the Comptroller & Auditor General (CAG) in the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). An investigation carried out by the Indian Express, points to systemic failures within the organisation that implements the flagship skills training scheme on behalf of the Ministry of Skill Development and Entrepreneurship (MSDE).
More than a year after NSDC cut short the tenure of its then CEO Ved Mani Tewari and months after the Ministry filed a police complaint alleging misappropriation of funds by some top officials, the corporation has turned its focus to accountability among its own workforce. The notices, sent earlier this month, list specific charges against each staffer under scrutiny and warn that cases will be referred to investigating agencies if financial misconduct or criminal culpability is detected.
CAG audit flags “gross negligence” and “wilful non-compliance”
The CAG 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. Its 94-page report, tabled in Parliament in December 2025, flagged multiple irregularities including:
- Fake bank account numbers linked to beneficiaries
- Duplication of identification details across candidates
- Non-payment to training partners for 34 lakh candidates
- Not effective coordination between Central and State departments
- Unreliable monitoring mechanisms by NSDC
- Poor monitoring and oversight by the Ministry
- Non-functional biometric attendance devices at skill centres
Following the report, the Ministry stated that the audit had significantly strengthened the scheme.
Key charges against staff: From data integrity to Aadhaar attendance
The Indian Express report reviewed some of the show-cause notices, which were sent over registered post and 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 notices describe the lapses as “gross negligence of duty” and “willful non-compliance” with PMKVY 2.0 guidelines (introduced in December 2017).
The key charges listed include:
- Failure to ensure job role selection was based on skill-gap analysis and market demand, which the CAG identified as the primary reason for low placements.
- Failure to verify accreditation status of Training Centres before approving Recognition of Prior Learning-Best in Class Employer, resulting in trainings at non-compliant centres.
- Failure to verify authenticity of documents before approving RPL-BICE payments, allowing “fabricated” evidence to pass scrutiny.
- Failure to ensure data integrity, resulting in a catastrophic data integrity compromise on the Skill India Portal.
- Failure to enforce geotagging requirements and verify inspector visit logs, allowing fraudulent inspection reports to be accepted.
- Failure to enforce Aadhaar-based Attendance for batches, resulting in attendance data being compromised.
Those associated with PMKVY 2.0 were also accused of lapses related to scrutiny of proposals, verification of employer eligibility criteria, clearance of outstanding payments to Skill Sector Councils and verification of candidate eligibility.
NSDC CEO defends action as accountability measure
Responding to The Indian Express, NSDC CEO Arunkumar Pillai said, “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 added, “Show cause notices have been issued as per applicable contractual or 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.”
He said that “any action will be based on examination of replies, records, and principles of natural justice.”
Former staff deny charges, call notices harassment
Several recipients of the notices, speaking on condition of anonymity to The Indian Express, denied the charges. One former staffer claimed to have left NSDC in 2016, before PMKVY 2.0 guidelines 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.”
CEO removal and police complaint over misappropriation
In May 2025, 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.
PMKVY: A flagship scheme with over 1.64 crore youth trained
The NSDC implements PMKVY on behalf of MSDE. PMKVY was launched in 2015 and has imparted skills training to over 1.64 crore youth till June 2025. The latest phase of the scheme, PMKVY 4.0, is ongoing.
The latest crackdown on 20 staff members underscores the gravity of the CAG’s findings and signals NSDC’s renewed focus on internal accountability as it continues to implement one of India’s largest skills development initiatives.