"In the area of skill development, we could not initially achieve as much progress as we wanted. But now the pace has picked up," the prime minister said in his Independence Day address.
"We have established the National Skill Development Authority a few months back," he said.
"We will shortly launch a new scheme under which those who have successfully acquired new skills will be given a grant of about Rs.10,000.
"This scheme will benefit about 10 lakh (one million) young men and women in the next 12 months."
Finance Minister P. Chidambaram had first announced the scheme in parliament in his budget speech for this fiscal, and set aside a provision of Rs.1,000 crore ($160 million) towards this.
The minister said the National Skill Development Corp will set the curriculum and standards for training in different skills and any institution or body may offer training courses.
Upon completion the candidate then has to take a test conducted by authorised agencies.
"Upon passing the test, the candidate will be given a certificate as well as a monetary reward of an average of Rs.10,000 per candidate. Skill- trained youth will give an enormous boost to employability and productivity," Chidambaram had said.
"On the assumption that 1000,000 youth can be motivated, I propose to set apart Rs.1,000 crore for this ambitious scheme. I hope that this will be the trigger to extend skill development to all the youth of the country."