PMSETUITI1

The scheme aims to upgrade ITIs into industry-led institutions. Through this scheme, infrastructure, training, and employment-oriented benefits are provided to trainees.

The scheme “Pradhan Mantri Skilling and Employability Transformation (PM SETU) Component I: Upgradation of Industrial Training Institutes” has been launched by the Ministry of Skill Development and Entrepreneurship (MSDE), Government of India. It aims to upgrade Industrial Training Institutes (ITIs) into industry-aligned, state-of-the-art skilling institutions to produce highly employable youth. Through this scheme, large-scale infrastructure upgradation, industry-led course design, and enhanced training and placement services are provided to students, trainees, and workforce participants. The scheme is implemented by the Directorate General of Training (DGT) in collaboration with State Governments and industry partners through a Special Purpose Vehicle (SPV) framework.

> Objectives:**** The scheme’s objective is to upgrade and reimagine ITIs through industryled governance into state-of-the-art skilling institutions that produce highly employable youth aligned with industry needs. The salient features include:

• One thousand (1,000) Government ITIs (200 as hub ITIs and 800 as spoke ITIs) to be upgraded in a Hub-and-Spoke arrangement. A Hub ITI will have, on average, four (4) Spoke ITIs, with all upgraded ITIs equipped with state-of-the-art infrastructure, machinery, and equipment.
• For upgradation of ITIs in Hub-and-Spoke arrangements, the institutional structure of a Special Purpose Vehicle (SPV) shall be established by bringing in a credible Anchor Industry Partner (AIP), along with other industry partners if required, to manage the Hub-and-Spoke cluster/s and deliver agreed outcome-based training and employment outcomes.
• Introduction of new courses based on jobs/occupations and competencies required in the identified sector/industry segment, with flexibility in duration and pedagogy.
• Redesign of existing courses to align with industry needs and improve employability. High-demand traditional courses to be revamped with upgraded curricula and modern technology.
• On average, four (4) new courses would be introduced, and ten (10) existing courses would be upgraded at the Hub ITIs. On average, two (2) new courses would be introduced, and eight (8) existing courses would be upgraded in Spoke ITIs.
• Flexibility to introduce courses related to the service sector, multi-skilled courses, and livelihood promotion (where industry presence is low).
• Other than the National Trade Certificate (NTC), which is the current course certification for ITI pass-outs, the options may include long-term courses (Diplomas), short-term courses (3-6 months), and Executive Education Programs for Graduates and working professionals, leveraging the presence of advanced machinery and equipment and trainers at Hub ITIs.
• Specialised short-term courses for both ITI and non-ITI (Engineering, Diploma, and working professionals) candidates.
• Facility for Training of Trainers (ToT) at the Hub ITI.
• Enhancement of student services, including those related to placement services and linkages to industries, counselling, remedial classes for addressing gaps in foundational learning, extra-curricular activities, life skills training, apprenticeships, and On-the-Job training, etc., in the Hub-and-Spoke cluster.
• Hubs may offer services like production centres, incubation centres, and maker spaces, for which the ITI can charge fees as determined by them for ensuring financial sustainability.
• Developing a digital interface and Learning Outcome Management System (LOMS) for mapping the entire network of Hub-and-Spoke ITI clusters, real-time data capture, digital learning avenues including artificial and virtual reality (AR/VR) capabilities, simulation, and linkages with the national datasets and Skill India Digital Hub (SIDH).
• A human resource plan for managing the implementation of the upgradation plan for both Hub and Spoke ITIs, including a managerial layer, trainers and administrative staff, and adoption of better HR practices, leading to improved training outcomes.
• Mini-Hubs for North-East and Hilly region: To allow implementation of ITI upgradation in Hub-and-Spoke arrangements in North-Eastern and Hilly States, the indicative definition of Hubs and Spokes may be relaxed.

> For Government ITIs:

• The ITIs should be Government Industrial Training Institutes.
• The selection of ITIs shall be carried out by the respective State or Union Territory.
• The selection should be based on factors such as emerging skill requirements, local industry demand, and potential for industry participation.

> For Anchor Industry Partner (AIP) / Industry Partner:

• The applicant should be a credible company or manufacturer with established operations in India.
• The applicant may be an industry association, consortium, industry-led foundation, or an academic institution promoted by industry.
• The applicant should have the capability to participate in governance, curriculum design, and training delivery.

> Minimum Eligibility Conditions (As Defined by State/UT):

• The applicant should meet the minimum eligibility criteria such as turnover, number of employees, and sectoral experience, as defined by the State or Union Territory.
• The applicant should demonstrate the ability to ensure meaningful industry participation.
• The applicant should not be a small or non-serious operator.

> Financial Outlay and Financing Structure:

The total outlay of the scheme is ₹60,000/- crore over five years. This cost is shared among

the Central Government, State Governments, and Industry, as shown below:

ParticularsTotal (₹ Crore)Central (₹ Crore)State (₹ Crore)Industry (₹ Crore)Total Scheme Outlay (5 years)60,000/-30,000/-20,000/-10,000/-This corresponds to a funding pattern of approximately 50% Central: 33% State: 17% Industry. Each Hub-and-Spoke cluster will maintain this cost-sharing ratio in its funding plan as indicated in the Strategic Investment Plan (SIP).

> Indicative Investment per ITI and Cluster:

• Under the Scheme, support will be provided for the upgradation of Hub ITIs with an outlay not exceeding ₹81 crore (over five years) and for Spoke ITIs with an outlay not exceeding ₹40 crore.
• In cases where the overall cost of upgradation exceeds the prescribed outlay, the contribution of the Central Government shall be capped at 50% of the above ceiling amounts and limited strictly to capital expenditure (exceptions apply for North-Eastern and Hilly States and Union Territories without legislature).

> Indicative Cost for Cluster:

• One Hub + Four Spokes (cluster total): ₹241 crore per cluster
• Annual cost for one cluster (5-year average): ~₹48.2 crore per year

> Component-wise Outlay (1000 ITIs):

• Upgradation of 200 Hub ITIs: ₹20,220 crore
• Upgradation of 800 Spoke ITIs: ₹36,680 crore
• Subtotal – ITI Upgradation (Component I): ₹56,900 crore

> Central Support for Scheme Management:

• ₹1,600 crore is earmarked for governance, project management, and capacity-building activities over five years, including:

• Capacity building of central and state agencies: ₹200 crore
• Office expenditure: ₹100 crore
• IT and digital infrastructure (including LOMS): ₹600 crore
• Technical assistance: ₹100 crore
• Media, awareness, and advocacy: ₹100 crore
• Evaluations, studies, and research: ₹100 crore
• Project Management Unit (PMU) support: ₹400 crore

> Fund Flow Mechanism:

• Each approved cluster SPV will operate an escrow bank account to collect funds from all sources. All contributions – Central, State, and Industry – are deposited into this escrow account, and funds become available only after all three parties have contributed their respective shares.

> Fund Disbursement:

• Initial Advance (Year 1):

• An advance of up to 10% of the total project outlay shall be released upon approval of the Strategic Investment Plan (SIP).

• Annual Instalments (Years 2–5):

• The remaining funds are disbursed in annual instalments in two tranches of 50% each, subject to:

• Utilisation of at least 75% of previous funds
• Approval of Annual Operational Plan (AOP)
• Achievement of at least 80% of Key Performance Indicators (KPIs)

> Validity:**** The scheme is implemented over a period of five years.