Nihar Ranjan Bhuyan
(bhuyannihar0020@gmail.com)
For decades, the Industrial Training Institute has been the quiet workhorse of Indian skilling. It is where a small-town teenager learns to weld, wire or fit, and where millions have found a first foothold in the job market. Yet the complaint from employers has barely changed: the training lags the factory floor. Machines are dated, curricula are slow to update, and graduates need months of retraining before they are useful.
The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs, or PM-SETU, is the government's most ambitious attempt to close that gap. The acronym is deliberate. Setu means bridge.
What PM-SETU is
Announced in the 2024-25 Union Budget, PM-SETU was cleared by the Union Cabinet on May 7, 2025, and launched by the Prime Minister Narendra Modi on October 4, 2025. It is a centrally sponsored scheme with an outlay of Rs 60,000 crore over five years (2025-2030), run by the Ministry of Skill Development and Entrepreneurship. The World Bank and the Asian Development Bank are co-financing it, alongside contributions from states and industry.
The scheme has two components. Component I upgrades 1,000 government ITIs through smart classrooms, modern laboratories, digital content and redesigned curricula. Component II strengthens five National Skill Training Institutes, in Bhubaneswar, Chennai, Hyderabad, Kanpur and Ludhiana, as centres of excellence, and funds a training-of-trainers programme to address the shortage of capable instructors.
The hub
Past ITI upgrades often spread money thinly across hundreds of institutions, leaving each with a few new machines and little else. PM-SETU instead organises ITIs into clusters: 200 hub ITIs, each linked to roughly four spoke ITIs, making 800 spokes in all.
The hub is meant to be the cluster's engine, with advanced infrastructure, innovation and incubation facilities, and training in emerging fields such as electric vehicles, artificial intelligence and renewable energy. Spokes provide foundational courses that feed into the hub, and share its faculty and resources. The idea is that a student in a smaller town gains access to equipment and expertise that no single modest ITI could justify on its own.
The approved clusters follow this template closely. Visakhapatnam in Andhra Pradesh, Bhiwadi in Rajasthan, Surat in Gujarat and Barbil in Odisha each pair one hub with four spokes.
Industry in full swing
The more radical change is in governance. Each cluster is managed by a special purpose vehicle, led by an Anchor Industry Partner. The partner provides strategic vision, investment and leadership, chairs the SPV board, and handles day-to-day operations such as budgeting, procurement, asset maintenance and placement support. It must also arrange the funding required beyond the government's share.
Official messaging describes the model as "government-owned but industry-managed." The institutions stay public, and fees and admissions stay within the public system, but the people responsible for outcomes are those who will eventually hire the graduates. If the scheme works, curricula will track what employers need rather than what a syllabus committee decided years ago.
From paper to plant floor
Implementation moved from announcement to contracts over about a year. In December 2025, the ministry formally invited industry leaders to participate, and states began releasing expressions of interest to find partners. Karnataka, Gujarat, Assam and Chandigarh were among the first.
In May 2026, the Centre cleared the first strategic investment plan, for the Visakhapatnam cluster, submitted by Arcelor Mittal Nippon Steel India with an academic partner. That made Andhra Pradesh the first state to onboard an anchor partner. In July 2026, the National Steering Committee approved the nationwide rollout across all 200 identified clusters, taking the scheme beyond its pilot phase. It also cleared plans worth about Rs 1,238 crore for five clusters, including Barbil in Odisha, where Jindal Naveen Avasar will be the anchor partner, and Surat, where Arcelor Mittal Nippon Steel India was selected.
In September 2026, an agreement was witnessed for the Bhiwadi cluster in Rajasthan, linking the ministry, the state and the infrastructure firm H.G. Infra. Government ITI Bhiwadi is the hub, with Alwar, Neemrana, Tijara and Kishangarh Bas as spokes.
Most recently, on October 16, the Centre approved more than Rs 1,000 crore for five clusters across Maharashtra, Odisha and Jammu and Kashmir, with the Odisha cluster receiving Rs 240.50 crore. The committee also reviewed progress on the training-of-trainers component. Separate reporting puts a plan covering ten ITIs in Jammu and Kashmir at Rs 482 crore.
What it means for Assam and the Northeast
For Assam and the wider Northeast, the stakes are particular. Guwahati was among the clusters named in the scheme's first phase, and Assam is one of the states that has issued an expression of interest to find industry partners. The region has long faced a mismatch between the number of young people trained and the local industrial base that can absorb them, which pushes many to migrate for work.
A well-chosen anchor partner could change that, by tying training to real hiring pipelines and bringing in capital the state budget cannot easily supply. The harder test will be the spokes. If Guwahati's hub thrives while ITIs in smaller towns see little change, the scheme will have rebuilt a showcase rather than a system. Partner selection in Assam, and the commitments made to its spoke institutions, are worth close attention.
The obstacles
The scheme's early months have not been smooth. A Careers360 report in May 2026 found that PM-SETU was struggling to attract industry partners, calling this the main hurdle, and noted that government ITIs were already in decline. The difficulty is easy to understand. Anchor partners are being asked to invest their own money and take on operational responsibility for public institutions, often without clear commercial returns. Heavy industry, with its own skill needs, is a natural fit. Regions with fewer large employers are a harder sell.
Other risks are structural. Hub-and-spoke only works if resources genuinely flow to spokes, so independent checks on which services reach spoke students, and whether access extends beyond the hub's own intake, will matter. The SPV model also raises questions of accountability: how public interest is protected when a private partner chairs the board, and what happens to staff and students if a partner exits. Finally, upgraded labs mean little without trainers who can use them, which is why the slower-moving Component II may prove as important as the headline clusters.
The measure of success
PM-SETU's design answers a diagnosis most skilling experts share: capital alone does not fix ITIs, because governance, curriculum and employer linkage were always the missing pieces. By making industry a stakeholder with money and reputation at risk, the scheme tackles the right problem.
But architecture is not outcomes. The real measures will be modest and measurable: how many graduates are placed, at what wages, in how many months, and whether those numbers hold up in spoke ITIs and in regions such as the Northeast. Since the Visakhapatnam approval in May, the pace has picked up, and with 200 clusters now cleared for rollout, the next year will show whether the bridge carries real traffic.