About this skills scheme
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.
Benefits at a glance
| Scheme name | Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM‑SETU) : Component I (PMSETUITI1) |
|---|---|
| Launched by | Ministry Of Skill Development And Entrepreneurship |
| Benefit type | In kind (goods, services or support, not cash) |
| Category | Skills |
| Level / State | Central · All India |
| Official portal | msde.gov.in (link at the end of this page) |
Key facts
| Scheme type | Central Sector Scheme |
|---|---|
| Scheme for | Infra |
| Application mode | Offline |
| Last date | Not given in the official listing |
| DBT (direct bank transfer) | No |
| Age | No lower limit to 80 years |
Who can apply (quick check)
- 👤All genders
- 🎂Age 0 to 80 years
- 📝Offline
Quick check from official data. Full conditions are in the Eligibility section.
What you receive
Financial Outlay and Financing Structure:
The total outlay of the scheme is Rs. 60,000/- crore over five years. This cost is shared among
the Central Government, State Governments, and Industry, as shown below:
| Particulars | Total (Rs. Crore) | Central (Rs. Crore) | State (Rs. Crore) | Industry (Rs. 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 Rs. 81 crore (over five years) and for Spoke ITIs with an outlay not exceeding Rs. 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): Rs. 241 crore per cluster
- Annual cost for one cluster (5-year average): ~Rs. 48.2 crore per year
Component-wise Outlay (1000 ITIs):
- Upgradation of 200 Hub ITIs: Rs. 20,220 crore
- Upgradation of 800 Spoke ITIs: Rs. 36,680 crore
- Subtotal – ITI Upgradation (Component I): Rs. 56,900 crore
Central Support for Scheme Management:
- Rs. 1,600 crore is earmarked for governance, project management, and capacity-building activities over five years, including:
- Capacity building of central and state agencies: Rs. 200 crore
- Office expenditure: Rs. 100 crore
- IT and digital infrastructure (including LOMS): Rs. 600 crore
- Technical assistance: Rs. 100 crore
- Media, awareness, and advocacy: Rs. 100 crore
- Evaluations, studies, and research: Rs. 100 crore
- Project Management Unit (PMU) support: Rs. 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.
Who qualifies
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.
Who is not eligible
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Papers to keep ready
- Expression of Interest (EOI) Document
- Request for Proposal (RFP) Response
- Strategic Investment Plan (SIP) as per the prescribed template
- Company Registration/Incorporation Documents (for industry partner)
- Financial Statements showing turnover (as per State criteria)
- Number of Employees Documentation
- Debarment Declaration Certificate (declaring not debarred by any government agency)
- Commitment Letters from State Government for staffing, scheme funding, and regulatory reforms
- Letters of Collaboration from partner industries (if applicable)
- Baseline Characteristics Document of Hub and Spoke ITIs (Template 1)
- Budget Allocation Documents of Last Three Financial Years (Template 2)
- Five-Year Investment Plan Budget (Template 3)
- Performance Indicators Documentation (Template 4)
- Implementation Gantt Chart (Template 5)
- MoUs with Industries for Employment, Apprenticeships, and Funding (if applicable)
- HR Plan Document including Managerial Capacity Details
- Credentials of Proposed SPV CEO and Management
- Shareholders' Agreement (SHA)
- License Agreement (LA)
- Performance Security (Bank Guarantee from Scheduled Bank)
- Annual Operational Plan (AOP)
- Asset Register
- Utilization Certificates Certified by Chartered Accountant
Note: Click Here For Template)
Registration walkthrough
Offline
Step 1: The State or Union Territory identifies Government Industrial Training Institutes (ITIs) for upgradation and prepares the Request for Proposal (RFP) along with defined eligibility criteria.
Step 2: The State or Union Territory issues the RFP to invite proposals from eligible Anchor Industry Partners (AIP) or industry partners.
Step 3: The applicant submits the proposal along with the Strategic Investment Plan (SIP), including details of infrastructure, courses, human resources, financials, and implementation strategy.
Step 4: The submitted proposals are evaluated through pre-qualification, technical assessment of the SIP, and financial evaluation.
Step 5: The State Government selects suitable proposals and forwards them to the National Steering Committee (NSC) for final approval.
Step 6: Upon approval, a Special Purpose Vehicle (SPV) is formed for each cluster, and agreements such as the Shareholder Agreement (SHA) and License Agreement (LA) are executed.
Step 7: An escrow account is established for the SPV, and contributions from the Central Government, State Government, and Industry are deposited into it.
Step 8: The SPV prepares the Annual Operational Plan (AOP) aligned with the approved Strategic Investment Plan (SIP).
Step 9: Funds are released in stages, starting with an initial advance and followed by instalments based on utilisation, performance, and approval of the AOP.
Step 10: The SPV undertakes the implementation of ITI upgradation, including infrastructure development, course delivery, and provision of training and student services.
Frequently asked questions
What is PM SETU and what is its objective?
PM SETU stands for Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs. It is a Centrally Sponsored Scheme launched by the Ministry of Skill Development and Entrepreneurship (MSDE) to upgrade 1,000 Government ITIs (200 Hub ITIs and 800 Spoke ITIs) as aspirational skilling institutions and establish 5 National Centres of Excellence, aligned with the goal of "Viksit Bharat" by 2047.
What is the total outlay of the scheme and how is it shared?
The total outlay is Rs. 60,000 crore over five years, shared as:
- Central Government: Rs. 30,000 crore (50%)
- State Governments: Rs. 20,000 crore (33%)
- Industry: Rs. 10,000 crore (17%)
Who can become an Anchor Industry Partner (AIP)?
Eligible entities include:
- Industry partners (credible companies/manufacturers with Indian operations, including PSUs)
- Industry associations or consortia
- Industry-led foundations (CSR/philanthropy arms of corporates)
- Academic institutions promoted/operated by industry (e.g., corporate universities, sectoral skilling institutions)
Entities debarred by any government agency are not eligible.
What is the Hub-and-Spoke model under PM SETU?
Under this model, 1,000 Government ITIs will be upgraded in clusters, with 200 Hub ITIs and 800 Spoke ITIs. Each Hub ITI will have, on average, 4 associated Spoke ITIs, all equipped with state-of-the-art infrastructure, machinery, and equipment. Mini-Hubs are allowed for the North-Eastern and Hilly regions.
What is the shareholding structure of the Industry-led SPV?
The Special Purpose Vehicle (SPV) is incorporated as a Section 8 Company with shareholding:
- Anchor Industry Partner (AIP): 51%
- Central Government: 24.5%
- State Government: 24.5%
The SPV has an initial share capital of Rs. 1,00,000 with each shareholder contributing pro rata.
What is the maximum funding per ITI?
- Hub ITI: Outlay not exceeding Rs. 81 crore over 5 years (Central: Rs. 40 crore, State: Rs. 30 crore, Industry: Rs. 11 crore).
- Spoke ITI: Outlay not exceeding Rs. 40 crore over 5 years (Central: Rs. 18 crore, State: Rs. 17 crore, Industry: Rs. 5 crore).
- One Hub + Four Spokes cluster total: Rs. 241 crore.
How are funds disbursed under the scheme?
- Year 1: Initial advance of up to 10% of total project outlay upon SIP approval
- Years 2-5: Annual instalments released in two tranches of 50% each
- First instalment requires at least 75% utilization of previous funds, AOP approval, and 80% KPI achievement
- Second instalment requires 50% mid-year KPI achievement and full industry/state contribution
- All transactions through escrow account at a Scheduled Commercial Bank; no cash transactions allowed.
What is the application process for industries to become AIP?
Step 1: State/UT releases Expression of Interest (EOI) within 30 days of guidelines issuance
Step 2: State/UT floats Request for Proposal (RFP) within 45 days
Step 3: AIP submits Strategic Investment Plan (SIP) within 75 days
Step 4: SSC recommends SIP within 90 days
Step 5: NSC approves SIP within 100 days
Step 6: SPV (Section 8 Company) is formed within 120 days
Step 7: Shareholders' Agreement (SHA) and License Agreement (LA) are signed.
How many new courses will be introduced and what is the curriculum structure?
- Hub ITIs: Average of 4 new courses and upgradation of 10 existing courses
- Spoke ITIs: Average of 2 new courses and upgradation of 8 existing courses
- Modular structure: 240 hours per module (8 credits each), with 3 Core Modules (720 hours) common across all ITIs and Specific Modules customized as per industry needs
- Total: 1,590 hours (1,200 + 150 OJT + 240 optional) earning 53 credits
- New courses approved through green channel within 15 working days.
What are the special provisions for North-Eastern and Hilly States?
- Funding pattern for NE and Hilly States: Centre:State:Industry ratio is 74.7%:8.3%:17% (with central funding including operational costs)
- For Union Territories without legislature: 83%:0%:17% (no UT share)
- Mini-Hubs allowed with relaxed definition of Hubs and Spokes for these regions
- Indicative cluster allocation: NE States - 10 clusters, Hill States and UTs - 10 clusters.
Submit your application yourself on the official portal; it costs nothing. Treat anyone demanding money to "get you approved" as a scam.
- Official Website www.msde.gov.in
tsmpb.in is not affiliated with any government department. Apply only on the official portal and never pay anyone for an application.
The details on this page are from the official listing and have not been rewritten or reviewed by our team yet. Confirm them on the official portal before applying.
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