The Comptroller and Auditor General of India has found serious irregularities in the governance mechanism and activities of the Centre’s skilling initiatives, and revealed that the National Skill Development Council received nearly 99 per cent of its funds from the Centre, with hardly any contributions from the private sector.

The CAG also found that the Centre’s financial stake in NSDC at 99.78 per cent was not commensurate with its equity ownership of 49 per cent.

“NSDC was kept out of the Parliamentary oversight over its functioning. The Government of India was the single largest shareholder in NSDC and was the sole contributor in NSDC’s finances, its role in decision making had been limited due to minority representation on the board of directors of NSDC,” it said in an audit report on the National Skill Development Fund and the NSDC.

NSDF funding

Similarly, the NSDF (National Skill Development Fund) was envisaged to act as a receptacle for financial contributions by the Centre, multilateral and bilateral entities, and the private sector.

But between 2008 and 2015, the NSDF received ₹3,300.74 crore from government sources, of which it released ₹2,362.90 crore to NSDC. “However, no contribution from private, bilateral or multilateral sources was received by NSDF even after five years since its formation,” it said, adding that NSDC had been working with taxpayer’s money only since its inception in 2008. The report, which was tabled in Parliament on Friday also noted that NSDC – a public private partnership – was set up in 2008 as a not-for-profit public company.

“But it was converted to a private limited company in June 2011. From the records made available to Audit, it could not ascertain whether Cabinet approval for this change had been taken,” said the report.

It also pointed to instances of lack of proper due diligence in considering the proposals for financial assistance and said that the monitoring and control mechanism in NSDC over the funded partners was weak.