National Skill Certification and Monetary Reward Scheme (STAR)

The National Skill Certification and Monetary Reward Scheme (NSCMRS), popularly known as the STAR Scheme, was launched by the Government of India in August 2013 to promote skill development among Indian youth. Implemented by the National Skill Development Corporation (NSDC) under the Ministry of Finance, the scheme sought to encourage individuals to acquire vocational skills and obtain nationally recognised certification, thereby enhancing employability and productivity. It was one of India’s earliest large-scale efforts to link skill training with direct financial incentives, setting the foundation for subsequent initiatives such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY).

Background and Rationale

India’s demographic profile during the early 2010s presented both an opportunity and a challenge. With nearly 65% of the population below 35 years of age, the country had a potential demographic dividend, but this advantage was undermined by low levels of formal skill training. Only around 2–3% of India’s workforce had received structured vocational education, compared to 60–80% in advanced economies.
Recognising the urgent need to bridge this skill gap, the National Policy on Skill Development (2009) called for innovative measures to expand access to quality training. The Union Budget 2013–14 subsequently announced the introduction of a monetary reward-based certification programme to motivate youth participation in skill development. As a result, the National Skill Certification and Monetary Reward Scheme was officially launched by the then Prime Minister Dr Manmohan Singh on 16 August 2013.

Objectives

The STAR Scheme was formulated with the following key objectives:

• To encourage youth to voluntarily acquire vocational skills through formal training.
• To reward individuals for successfully obtaining skill certification recognised by industry and the government.
• To standardise skill training across the country under a common national framework.
• To recognise prior learning (RPL) for those who had gained skills informally through work experience.
• To enhance employability and productivity, leading to better livelihood opportunities.
• To create a skilled labour force capable of meeting domestic and global industry demands.

The mission was also aligned with India’s broader development agenda of achieving inclusive growth through human capital development.

Institutional Framework

The scheme was administered by the National Skill Development Corporation (NSDC), a public–private partnership under the Ministry of Skill Development and Entrepreneurship (MSDE). NSDC worked in coordination with the following key institutional mechanisms:

• Sector Skill Councils (SSCs): Industry-led bodies responsible for developing occupational standards, curricula, and assessment criteria for specific sectors.
• Training Partners: Registered organisations and institutions delivering skill development courses.
• Assessment Agencies: Independent third-party evaluators ensuring objective certification.
• Skill Development Management System (SDMS): A centralised digital platform for tracking enrolments, training, assessment, certification, and fund disbursement.

This institutional structure ensured transparency, standardisation, and accountability in the implementation process.

Features and Design

The STAR Scheme introduced a novel concept by linking certification with monetary incentives, thereby promoting both training and assessment quality. Its main design elements were:

• Target Group: Youth aged 18 years and above, including school and college dropouts, unemployed individuals, and workers seeking skill upgradation.
• Duration: Short-term training courses of 2 weeks to 6 months, depending on job role and skill level.
• Eligibility: Enrolment in an NSDC-approved training programme aligned with the National Skills Qualification Framework (NSQF) or equivalent.
• Monetary Reward: A one-time cash incentive between ₹10,000 and ₹15,000, disbursed directly to candidates’ bank accounts upon successful certification via the Direct Benefit Transfer (DBT) system.
• Recognition of Prior Learning (RPL): Provision for assessing and certifying workers who had acquired informal skills on the job.
• Sectoral Coverage: Over 200 job roles across 21 key sectors, including retail, construction, healthcare, IT, hospitality, automotive, and manufacturing.

Funding and Implementation

The scheme was 100% government-funded, with an initial budgetary allocation of ₹1,000 crore for the financial year 2013–14. The funds were managed by NSDC, which disbursed monetary rewards to certified candidates after verification of assessment results.
Implementation began across all Indian states and union territories through a network of NSDC-affiliated training partners. The scheme targeted 10 lakh beneficiaries within its first operational year. Due to high enrolment and strong demand, the scheme trained and certified over 9 lakh youth by the end of 2014, surpassing its original target.

Certification and Quality Assurance

To maintain the credibility and uniformity of the certification process, the scheme followed strict quality control measures:

• Curriculum Alignment: All courses were mapped to the National Occupational Standards (NOS) developed by SSCs.
• Independent Assessments: Candidates were assessed by authorised third-party agencies separate from training providers to ensure impartial evaluation.
• Digital Record-Keeping: Candidate registration, assessment, and certification data were maintained on the SDMS platform.
• Unique Identification: Each candidate was assigned a unique ID linked to Aadhaar, preventing duplication and ensuring accurate tracking.

Certificates issued under the STAR Scheme were nationally recognised and carried the logos of both NSDC and the concerned Sector Skill Council.

Achievements

The STAR Scheme was notable for its large-scale reach and rapid implementation. Key outcomes included:

• Over 13 lakh enrolments and 9 lakh certifications within a single year of operation.
• Creation of a nationwide ecosystem of skill training centres and assessment agencies.
• Enhanced awareness among youth regarding the value of formal skill certification.
• Introduction of digital data systems for end-to-end monitoring, setting the foundation for future skill initiatives.
• Strengthened collaboration between industry, government, and training institutions.

The scheme also served as an experimental model for identifying operational challenges and refining approaches for large-scale skill development programmes.

Challenges and Limitations

Despite its achievements, the STAR Scheme encountered several challenges:

• Variation in training quality across states and providers.
• Weak linkage between training and employment, as many certified individuals did not secure jobs immediately after certification.
• Short duration of training was often inadequate for complex technical roles.
• Verification and monitoring gaps, with some cases of duplication and improper data entry.
• Limited awareness in rural areas, leading to uneven participation across regions.

These issues highlighted the need for stronger institutional frameworks, better quality control, and post-training support mechanisms.

Transition to the Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

Building on the experiences and lessons of the STAR Scheme, the Government of India launched the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) in 2015 under the newly formed Ministry of Skill Development and Entrepreneurship (MSDE). PMKVY incorporated key features of the STAR Scheme — such as performance-based certification and monetary rewards — but introduced enhanced monitoring, placement tracking, and quality assurance mechanisms.
The STAR Scheme thus served as the pilot initiative that laid the operational and institutional groundwork for PMKVY and the larger Skill India Mission.

Significance and Legacy

The National Skill Certification and Monetary Reward (STAR) Scheme represented a landmark shift in India’s skill development strategy. It was the first government initiative to:

• Directly link financial incentives with skill acquisition and certification.
• Create a structured, standardised, and measurable skill development system.
• Promote a culture of recognition for vocational and technical skills.
• Encourage public–private collaboration through NSDC and Sector Skill Councils.