India Launches ₹60,000 Crore ITI Transformation Scheme
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The Ministry of Skill Development and Entrepreneurship (MSDE) has outlined a comprehensive rollout plan for the Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) scheme, allocating an estimated ₹60,000 crore to transform 1,000 government Industrial Training Institutes (ITIs) into industry-aligned Centres of Excellence (CoEs). Announced during a high-level industry interaction in Mumbai, the initiative introduces a hub-and-spoke model and industry-led governance to address skill mismatches and enhance employability nationwide.
Announcement and Key Features of PM-SETU
Shri Jayant Chaudhary, Minister of State (Independent Charge) for Skill Development and Entrepreneurship and Minister of State for Education, chaired the event titled “Fostering Industry–Government Collaboration for Skilling Talent” at the Taj Mahal Palace in Mumbai. Organised in partnership with the Confederation of Indian Industry (CII), the interaction brought together senior leaders from sectors such as education, health, hospitality, banking, and manufacturing. The minister highlighted PM-SETU as a flagship reform to reposition ITIs as modern, outcome-driven institutions capable of meeting evolving labour market demands.
Under PM-SETU, 1,000 government ITIs will be upgraded through a structured hub-and-spoke framework. This model designates 200 ITIs as hubs and links them with 800 spoke ITIs, enabling scalable delivery of quality vocational education across the country. The scheme emphasises advanced skills training, trainer development, and curriculum innovation tailored to industry needs. A central element is the establishment of a Special Purpose Vehicle (SPV) for industry-led governance, which will handle financial management, infrastructure upgrades, equipment procurement, monitoring, evaluation, and stakeholder coordination.
“PM-SETU represents a systemic shift in how vocational institutions engage with industry. By embedding industry participation in curriculum design, trainer exposure, apprenticeships and placements, we are creating ITIs that are relevant, aspirational and directly aligned with labour-market needs—both domestic and global,” Shri Jayant Chaudhary stated.
The ₹60,000 crore outlay underscores the government's commitment to bridging the gap between available talent and employer requirements. Rapid technological advancements, shifting workplace models, and demographic changes have intensified skill mismatches, where a large youth workforce exists but lacks job-ready competencies. PM-SETU aims to rectify this by fostering deeper industry-government collaboration.
Implementation Framework and Hub-and-Spoke Model
The rollout plan prioritises a phased approach to ensure effective execution. Hub ITIs will serve as Centres of Excellence, equipped with state-of-the-art infrastructure for high-end skilling in emerging areas such as advanced manufacturing, digital technologies, healthcare, and green energy. These hubs will develop model curricula, train master trainers, and pilot innovative programmes before disseminating them to spoke ITIs.
Spoke ITIs, connected to the hubs, will receive support in curriculum alignment, faculty upskilling, and equipment standardisation. This decentralised yet coordinated structure allows for region-specific customisation while maintaining national standards. The SPV will oversee transparent fund allocation, ensuring that investments translate into measurable outcomes like increased enrolment, higher placement rates, and improved apprenticeship uptake.
Industry involvement extends beyond governance. Participating sectors will contribute to curriculum design by providing real-time input on required competencies. Trainer exposure programmes will facilitate exchanges between ITI faculty and industry experts, while mandatory apprenticeship linkages under the National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Training Scheme (NATS) will create direct pathways from training to employment.
Addressing Skill Gaps and Enhancing Employability
Speaking at the event, Smt. Archana Mayaram, Economic Advisor at MSDE, presented details on PM-SETU and emphasised the widening disconnect between industry demand and available skills. Employers frequently report difficulties in sourcing candidates with practical, sector-specific abilities, exacerbated by technological disruptions like automation and AI integration. Younger generations, particularly Gen-Z, seek rapid career progression and stability, necessitating initiatives that elevate the aspirational value of vocational training.
PM-SETU integrates tools like the Employability Matrix, a standardised index to evaluate job readiness across sectors. This framework will enable data-driven improvements in training programmes. Additionally, linkages with APAAR IDs and the Academic Bank of Credits (ABCs) will support flexible learning paths, credit transferability, and lifelong upskilling, allowing trainees to pursue higher education or reskilling seamlessly.
The scheme aligns with broader skilling ecosystems, including Skill India International Centres (SIICs) for global mobility and India's participation in the World Economic Forum’s Skill Accelerator. These complements position upgraded ITIs as gateways for international-standard training and overseas opportunities, enhancing India's global competitiveness.
Industry Response and Collaborative Pathways
The interactive session featured robust discussions among industry stakeholders, CII representatives, and government officials. Participants stressed the need for aligned training programmes and stronger placement mechanisms to boost ITI enrolment, which has historically lagged due to perceptions of limited career prospects. Industries committed to contributing through guest faculty, on-site training, and hiring commitments.
Sectors like manufacturing and hospitality identified priorities such as mechatronics, renewable energy technicians, and digital hospitality management. Banking representatives highlighted demand for fintech skills, while healthcare experts called for advanced nursing and medical device operation training. The consensus was that sustained partnerships would build a future-ready workforce capable of driving economic growth.
Administrative Mechanisms and Monitoring
To ensure accountability, PM-SETU incorporates robust monitoring and evaluation protocols managed by the SPV. Key performance indicators include placement rates above 70 per cent, apprenticeship absorption exceeding 50 per cent of trainees, and trainer certification levels reaching 100 per cent in hub ITIs. Digital dashboards will provide real-time tracking, with annual audits by independent agencies.
Funding will flow through a combination of central allocations, state contributions, and industry partnerships. States with high concentrations of ITIs, such as Uttar Pradesh, Maharashtra, and Tamil Nadu, stand to benefit significantly, with provisions for equitable distribution to underserved regions. Infrastructure upgrades will prioritise energy-efficient buildings, smart classrooms, and industry-grade labs, adhering to green standards.
Expected Public and Economic Impact
The upgrade of 1,000 ITIs could skill over 10 million youth in the next five years, directly impacting rural and semi-urban economies. Enhanced employability will reduce youth unemployment, currently hovering around 23 per cent for the 15-29 age group, and promote inclusive growth by targeting women, Scheduled Castes, Scheduled Tribes, and differently-abled individuals through reserved quotas.
Administrative impacts include streamlined governance via the SPV model, reducing bureaucratic delays in procurement and curriculum approvals. Publicly, the scheme elevates ITIs from traditional trade schools to aspirational institutions, potentially reversing enrolment declines and fostering a culture of vocational pride.
By linking skilling to apprenticeships and placements, PM-SETU addresses structural unemployment, where graduates possess degrees but lack practical skills. This could yield a multiplier effect: skilled workers boost productivity, attract investments, and support initiatives like Make in India and Atmanirbhar Bharat in labour-intensive sectors.
Integration with National Skilling Ecosystem
PM-SETU builds on existing frameworks like Skill India, which has trained over 50 million youth since 2015. It complements NAPS by mandating industry-sponsored apprenticeships, with incentives for MSMEs to participate. The scheme also aligns with the National Education Policy 2020's emphasis on vocational integration from school level.
Technological integration features prominently: ITIs will adopt virtual reality for simulations, AI-driven assessments, and blockchain for credential verification. These innovations ensure curricula remain dynamic, adapting to disruptions like Industry 4.0 and sustainable development goals.
Challenges and Mitigation Strategies
While ambitious, the rollout faces hurdles such as varying state capacities, trainer shortages, and industry hesitancy in remote areas. The government plans capacity-building workshops for state officials and incentives like tax rebates for industry partners. Pilot phases in select hubs will iron out issues before national scaling.
Quality assurance through the Employability Matrix will mitigate risks of subpar outcomes. Regular feedback loops with trainees and employers will refine programmes, ensuring relevance.
Long-Term Vision for Vocational Education
PM-SETU positions vocational training as a cornerstone of India's demographic dividend, aiming for a 50 per cent Gross Enrolment Ratio in skilling by 2030. Success will hinge on execution, with the Mumbai interaction marking a pivotal step in mobilising stakeholders.
As implementation advances, quarterly progress reports from MSDE will track milestones, fostering transparency. This initiative could redefine India's skilling landscape, producing a workforce resilient to global shifts and integral to Viksit Bharat.
The event concluded with commitments for follow-up roundtables, signalling sustained momentum. With ₹60,000 crore invested in human capital, PM-SETU holds promise for transformative socio-economic outcomes.
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