Apex Auditor Picks Holes in NSDC Design, Functioning

Published: 19th December 2015 03:40 AM  |   Last Updated: 19th December 2015 03:40 AM   |  A+A-

NEW DELHI: The CAG has asked the government to have a relook at the design and operation of the National Skill Development Corporation (NSDC).

The CAG said the NSDC was kept out of Parliamentary oversight over its functioning though over 99 per cent funding of the NSDC was from taxpayer’s money.

Till 2015, Rs 2,363 crore has been released by the government towards its functioning, said the CAG, in a report tabled in Parliament on Friday. “The NSDC was converted from a public limited company to a private limited company. This has further weakened the governance mechanism of the NSDC as corporate governance norms are not applicable on the private limited companies. Surprisingly, no evidence of taking Cabinet approval for this change was available,” the CAG report said.The report has also questioned the appointment process of IL&FS Trust Company Limited as a partner of the NSDC.

The CAG said there was a case of conflict of interest as another company of IL&FS group had got sanction for funding of Rs 159 crore from the NSDC in 2010-2011.

“Despite that, IL&FS Trust Company Limited was declared as qualified by the technical committee on the ground that members in the two board of directors were not same, shareholders of the two were different and IL&FS Trust Company Limited had filed a declaration that they did not have any conflict of interest due to any existing or forthcoming association with the NSDC,” the report said.

The report said though the NSDC provided assistance to partners for meeting their training targets, 57 per cent to 83 per cent of the partners did not achieve their targets during 2010-11 to 2013-2014. “Additionally, a majority of them could not achieve their placement targets as well. These issues were very serious as they defeated the very purpose of creation of the NSDC,” the CAG observed.

The auditor said that in four cases, apart from failure to achievethe targets, there was default in repayment of loans also. These partners include GRAS Hospitality, Everonn Skill Development, Job Skills Solution and Laqsh Job Skills Academy.


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