Parliament Question: Distress due to NSDC loan defaults

GOVERNMENT OF INDIA MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP RAJYA SABHA UNSTARRED QUESTION No. 1398 ANSWERED ON- 11/02/2026 DISTRESS DUE TO NSDC LOAN DEFAULTS

1398. SHRI I.S. INBADURAI:

Will the Minister of SKILL DEVELOPMENT AND ENTREPRENEURSHIP be pleased to state:

(a) the total number of youths and senior citizens across the country who have become defaulters under National Skill Development Corporation (NSDC)-linked skill and education loan schemes, if so, the State- wise details thereof;

(b) whether Government is aware that a significant number of beneficiaries defaulted not due to wilful negligence but because of failure of training programmes, poor placement outcomes and non-viable course structures; and

(c) whether Government will consider a compassionate national policy including loan restructuring, interest waiver or one-time settlement for genuine defaulters, particularly affecting unemployed youths and dependent senior citizens? ANSWER THE MINISTER OF STATE (INDEPENDENT CHARGE) IN THE MINISTRY OF SKILL DEVELOPMENT AND ENTREPRENEURSHIP (SHRI JAYANT CHAUDHARY)

(a) to (c): Ministry of Skill Development and Entrepreneurship (MSDE) notified the Credit Guarantee Fund Scheme for Skill Development (CGFSSD) on 20th November 2015 to provide guarantee cover to Skill Loan Scheme to the extent of 75% of the defaulted loan amount to member lending institutions, with the fund being managed and operated by the National Credit Guarantee Trustee Company (NCGTC).

The scheme enables Indian nationals admitted to skill development courses aligned with the National Skill Qualification Framework (NSQF)—offered by ITIs, Polytechnics, recognized schools and colleges, universities, and training partners affiliated with NSDC, Sector Skill Councils, State Skill Missions, or State Skill Corporations—to avail loans for this purpose, ranging from ₹5,000 to ₹1,50,000, with a repayment period of 3 to 7 years. Under this scheme, interest rate to be charged by Member Lending Institutions (MLIs) should not be more than 1.5% per annum over base rate. Further, borrower must enter into an agreement with NCGTC for providing guarantee against default in repayment of the loan extended by lending institutions.

The scheme inter-alia includes the various provisions such as no processing fee, simple rate of interest @11% and 12% per annum during the period of study, sanction of loan without any collateral security or third-party guarantee, no minimum restriction with regard to age etc. which in turn encourage individuals to make use of the scheme. Under the scheme, there are 1597 loan accounts amounting to Rs 18.27 Cr which have been turned NPA (non-performing assets). The State-wise number and amount of loans defaulted as on 31.01.2026 under CGFSSD is given at Annexure I.

The scheme was revised and notified on 9th July 2024 to enhance the coverage of the scheme and to provide access to skill trainees/candidates to wide range of high-end courses without any financial constraints. The major changes in modified CGFSSD inter-alia include the increase in maximum loan limit from Rs. 1.5 lakh to Rs. 7.5 lakh, inclusion of non-NSQF aligned courses delivered through Skill India Digital Hub (SIDH), and inclusion of NBFCs/ NBFC-MFIs and Small Finance Banks as the member lending institutions.Annexure-I ANNEXURE REFERRED TO IN REPLY TO PART (a) to (c) OF RAJYA SABHA UNSTARRED QUESTION NO. 1398 ANSWERED ON 11.02.2026 REGARDING ‘DISTRESS DUE TO NSDC LOAN DEFAULTS’ State-wise Number and Amount of loans defaulted as on 31.01.2026 under CGFSSD (As on 31.01.2026) State Name Number of Loans turned NPA Andaman And Nicobar Islands 0 Andhra Pradesh 11 Assam 32 Bihar 7 Chandigarh 1 Chhattisgarh 29 Dadra and Nagar Haveli and Daman and Diu 0 Delhi 37 Goa 2 Gujarat 67 Haryana 63 Himachal Pradesh 5 Jammu And Kashmir 9 Jharkhand 96 Karnataka 70 Kerala 400 Lakshadweep 0 Madhya Pradesh 79 Maharashtra 146 Manipur 0 Meghalaya 0 Mizoram 0 Nagaland 1 Odisha 17 Puducherry 4 Punjab 78 Rajasthan 18 Sikkim 1 Tamil Nadu 136 Telangana 12 Tripura 0 Uttar Pradesh 89 Uttarakhand 8 West Bengal 179 Grand Total 1597 *****