Bhopal: Companies not found at their registered addresses, and others which have registered their family members as trainees to corner the Rs 8,000-Rs 10,000 a month stipend—the Madhya Pradesh government has found glaring discrepancies in an ambitious scheme launched in 2023 by then chief minister Shivraj Singh Chouhan to create a skilled workforce of 1 lakh youths per year, ThePrint has learnt.
The Mukhyamantri Seekho Kamao Yojana (MMSKY) was launched in August 2023, just three months ahead of the state elections. But just six months after the launch, district authorities started getting reports of establishments not found at their registered addresses.
For instance, in Tendukheda tehsil in Damoh district, as many as 40 establishments registered to provide internship, were found missing on the ground. Many establishments that were registered under the scheme turned out to be small shops with children of the family enrolled as trainees, allowing them to collect the Rs 8000- Rs 10,000 per month stipend for each child.
An embarrassed state government is now working to weed out fraudulent establishments and fixing loopholes in the scheme.
Not only fraudulent practices, the scheme has also missed the target of training one lakh youth a year. In the past two years, only 25,203 youths have received on job training. Of this, the largest chunk of 20,000 students were trained during the first year, but this figure sharply dropped to 3,500 in the second year. This is just 12 percent of its set target of training to two lakh youths in two years.
In the current year, the number has dropped to 1,500 as the government tightened the policy guidelines.
The lacklustre response has now forced the government to cut down the target of training one lakh youths every year. State government officials, who did not want to be named, told ThePrint that they have realised that the earlier target was “unrealistic” and downgraded it to one lakh youths in the next five years.
Mukhyamantri Seekho Kamao Yojana
In July 2023, five months before the assembly elections in November, the government began accepting registrations from establishments for providing ‘on job training’ to youth between 18 and 29 years of age. A budget of Rs 1,000 crore was laid out for it.
Simultaneously, unemployed youth seeking year-long training for a stipend ranging between Rs 8,000 and Rs 10,000 began registering on the portal as well. The skill development department registered 21,118 establishments. Of these, merely 2,223 or 10 percent were EPFO-registered, while the remaining 90 percent or 18,895 establishments were non-EPFO, and were registered simply on the basis of their GST numbers.
An EPFO establishments is one, which has more than 20 employees and contributes towards the employee provident fund, whereas establishments with less than 20 employees do not need to deposit provident funds and are categorised as non-EPFO and include startups, small firms, small businesses, etc. The MP government has allowed non-EPFO companies to participate in the scheme to promote Medium and Small Scale (MSMEs) industries.
Reports of alleged fraud
It was in February 2024, when the transfer of the monthly stipend to trainees was delayed, that complaints began reaching authorities about shops with just one employee and two to three trainees.
“After we received complaints, we verified 121 establishments in the first round and found 50 percent were in violation of guidelines. Another 233 contracts between establishments and trainees were cancelled with blood relations being established,” Abhishek Tiwari, principal of ITI Damoh, explained to ThePrint.
While the scheme only allowed establishments to hire 15 percent of their total workforce as trainees, most establishments were found to inflate their employee strength to be able to hire more trainees. In other instances, it was found that establishment owners had onboarded family members as trainees even though it was against the rules of the policy.
A government official explained that the scheme was widely promoted with instructions given to all departments to encourage vendors registered with them to participate in the yojana.
In the first year of the scheme, 20,000 students were connected to establishments for a year-long ‘on job training’ with the government paying 75 percent of the stipend, and the remaining 25 percent being paid by the establishments themselves.
But despite so many registrations, there was no mechanism for the district administration to monitor the training of the students online. With limited resources on hand at the district level, the scheme was rolled out without physical verification of the information submitted by the establishments.
Six months later in April 2024, Damoh became the first district to begin physical verification. Soon after, a similar exercise was ordered across the state.
A senior official from MP Skilling Department told ThePrint, “Reports similar to Damoh were received from across the districts in the state. The highest number of cases involved establishments taking up more trainees than they could support or train and most often these trainees were family members.”
This prompted the state government to order a review of the entire scheme and fix the loop holes. According to officials, while 18,895 non-EPFO establishments are registered on the portal, currently only about 7,500 establishments are under scrutiny.
According to officials from the skilling department, of the 7,500 non-EPFO registered organisations, close to 2,000 have been found violating the rules and have been issued notices. “We cannot totally do away with non-EPFO establishments as it is the government’s mandate to support MSMEs. But to tackle the present situation, we are making stringent guidelines and having a limited verified number of non-EPFO establishments,” explained a senior official from the MP government.
The government has also started roping in PSUs and other government departments such as MP Tourism, Bharat Heavy Electrics Limited (BHEL), Madhya Pradesh Khetra Vidhyut Vitran Company Limited (MP KVVCL) for ‘on-job-training’ of students.
A government team has begun physical verification and scrutiny of all non-EPFO registered establishments and updating the same data in an in-house app developed by the MP State Electronic Development Corporation. Along with this, every trainee will have to mark attendance online through geo-tagging. This will let authorities monitor attendance online.
The government has also begun the process of issuing certificates to students who have completed their year-long training. The first batch of 1,650 students was awarded certificates two months ago; the process to issue certificates to others is underway.
The department is also closely looking at applicants to remove candidates who do not fit the criteria. So far at least 50,000 applicants have been identified as overage. Similarly, applicants who have worked in a specific company previously and are trying to join again will not be employed.
“It is only after starting the training that we had establishments coming and informing us that a certain trainee has a previous UAN ID with the company, and hence could not be allowed or they are overage. When we started out, we did not think we would face this problem, but as we are implementing the scheme, new challenges are coming up, which has forced us to reshape the policy guidelines,” said an official from the MP skill development department.
(Edited by Viny Mishra)