PM-SETU SCHEME: FEATURES, HUB-SPOKE MODEL, CHALLENGES & WAY FORWARD

Why In News?

The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) scheme completed one year of implementation.

What Is The PM-SETU Scheme?

The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) is a Centrally Sponsored Scheme launched by the Ministry of Skill Development and Entrepreneurship (MSDE).

The Prime Minister officially launched the five-year program on October 4, 2025, backed by a total outlay of ₹60,000 crore.

The scheme aligns with the National Education Policy (NEP) 2020 and the National Credit Framework (NCrF), integrating general and vocational learning where 30 hours of training equals 1 credit under the National Skills Qualification Framework (NSQF).

Core Objectives Of The Scheme

• Infrastructure Modernization: Replace outdated workshop machinery with Industry 4.0 standard equipment, high-speed digital networks, and smart classrooms across public ITIs.

• Curriculum Transformation: Introduce modular, market-relevant trades under the Craftsmen Training Scheme (CTS) that cater to emerging technology sectors.

• Capacity Augmentation of NSTIs: Upgrade five National Skill Training Institutes (NSTIs) in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana into National Centres of Excellence (NCoEs) under Component II.

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• Train the Trainer (ToT) Focus: Upskill over 50,000 vocational instructors across ITIs and NSTIs through global academic partnerships to eliminate the trainer competency deficit (Source: Directorate General of Training).

• Employability & Placement Enhancement: Mandate On-the-Job Training (OJT) and industry exposure to achieve graduate placement rates exceeding 75% with a minimum 50% wage growth over baseline levels.

 Hub-And-Spoke Model Under PM-SETU 

• Component I Architecture: PM-SETU upgrades 1,000 Government ITIs using a Hub-and-Spoke model comprising 200 Hub ITIs and 800 Spoke ITIs.

• Resource Sharing & Synergy: Each Hub ITI connects to approximately four Spoke ITIs, serving as a centralized technology node that houses advanced laboratories, smart classrooms, innovation centers, production units, and placement cells.

• Capital Outlay Breakdown: An average cluster of one Hub ITI and four Spoke ITIs requires a total 5-year budget of ₹241 crore, where individual Hub ITI upgradation is capped at ₹81 crore and Spoke ITI upgradation at ₹40 crore.

• Regional Integration: Spoke ITIs provide regional outreach and basic practical instruction while accessing high-end simulation infrastructure, AR/VR capabilities, and specialized trade modules at their assigned Hub ITI.

Governance Architecture Of PM-SETU

• Special Purpose Vehicle (SPV) Governance: Operations of each upgraded ITI cluster are managed by a Special Purpose Vehicle (SPV) incorporated as a Section 8 non-profit company under the Companies Act, 2013.

• Equity Distribution: The Anchor Industry Partner (AIP) holds a majority 51% shareholding, while the Central Government and State Government hold 24.5% each.

• Operational Autonomy: The SPV exercises full autonomy over course design, trainer hiring, fee structures for non-CTS courses, and campus management via a tripartite Shareholders' Agreement (SHA) and License Agreement (LA).

• Multi-Tiered Administrative Framework:

• National Steering Committee (NSC): Chaired by the Secretary, MSDE, serving as the apex body approving operational guidelines and Strategic Investment Plans (SIPs).

• State Steering Committee (SSC): Chaired by the Chief Secretary of the respective State/UT to oversee cluster identification, state budget allocation, and inter-departmental convergence.

• Digital Monitoring: Real-time tracking through the Learning Outcome Management System (LOMS) integrated with the Skill India Digital Hub (SIDH).

Financial Architecture And Cost-Sharing Pattern

• Tripartite Funding Ratio: The ₹60,000 crore total outlay is funded in a 50:33:17 ratio among the Central Government (₹30,000 crore), State Governments (₹20,000 crore), and Industry Partners (₹10,000 crore).

• Multilateral Co-Financing: Co-financed up to 50% of the Central share through Result-Based Loans split equally between the World Bank and the Asian Development Bank (ADB).

• Escrow Account Mechanism: Contributions from all three stakeholders are pooled into a cluster-level Escrow Account managed by the SPV.

• Milestone-Based Disbursement: Fund tranches are released based on Disbursement Linked Indicators (DLIs) and Key Performance Indicators (KPIs), requiring at least 75% utilization of previous releases prior to subsequent tranche approvals.

Key Target Sectors 

• 32 New-Age CTS Courses: The Directorate General of Training (DGT) has introduced 32 new-age courses under the Craftsmen Training Scheme.

• Core Technology Focus Areas:

• Artificial Intelligence (AI) & Data Analytics: Including the 1-year Artificial Intelligence Programming Assistant (AIPA) course and Generative AI modules.

• Automation & Robotics: Advanced mechatronics, industrial robotics, and Additive Manufacturing (3D Printing).

• Mobility & Clean Energy: Electric Vehicles (EVs), Green Hydrogen, Solar Energy, and battery management.

• Electronics & Telecom: Semiconductor Technology, 5G Networks, IoT, Cyber Security, and Software Testing.

• Global Academic Alliances: NSTI Chennai has partnered with Singapore, NSTI Kanpur with France, NSTI Bhubaneswar with Australia, and NSTI Hyderabad with Germany for global technology transfer.

Source: PIB