Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM SETU) is a centrally sponsored scheme of the Ministry of Skill Development and Entrepreneurship (MSDE). It upgrades government ITIs into modern, industry-aligned campuses so that more young people can find work after training.
PM SETU works through a hub-and-spoke model. Under it, 1,000 government ITIs are being upgraded, with 200 hubs and 800 spokes. The scheme is still open for states and industry partners to join, and the official portal at pm-setu.skillindiadigital.gov.in is live for the latest details and updates.
PM SETU Component I - Introduction
PM SETU Component I focuses on the upgradation of industrial training institutes. The Directorate General of Training (DGT) implements the scheme with state governments and Anchor Industry Partners (AIP) through a Special Purpose Vehicle (SPV). The scheme has two components. Component I upgrades 1,000 government ITIs in a hub and spoke model, and Component II strengthens five National Skill Training Institutes (NSTIs) in Bhubaneswar, Chennai, Hyderabad, Kanpur and Ludhiana.
The scheme gets a total outlay of ₹60,000 crore. Of this, the central government shares ₹30,000 crore, states share ₹20,000 crore and industry shares ₹10,000 crore. The Asian Development Bank and the World Bank provide co-financing to the extent of 50% of the central share, equally.
Selection of ITIs is led by each state or union territory government in consultation with industry. States submit proposals for upgradation with industry partners. So far, 32 states and union territories have set up their State Steering Committee (SSC), and 19 states and union territories have floated proposals to invite industry interest.
Key Information
| Detail | Information |
|---|---|
| Scheme Name | Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM SETU) : Component I |
| Level | Central |
| Beneficiary States | All |
| Category | Skills and Employment |
| Target Beneficiaries | Government Organisations, Industries, State Governments |
| Benefit Type | In Kind |
| Nodal Ministry | Ministry of Skill Development and Entrepreneurship |
| Official Portal | pm-setu.skillindiadigital.gov.in |
Benefits
PM SETU brings a large funding support to modernize vocational training across the country. The money is split between the centre, states and industry, and is released only when the SPV meets its targets.
- Total Outlay: ₹60,000 crore over five years, with central share of ₹30,000 crore, state share of ₹20,000 crore and industry share of ₹10,000 crore.
- Co-financing: The Asian Development Bank and the World Bank jointly co-finance up to 50% of the central share.
- Investment Ceiling: Up to ₹81 crore for Hub ITIs and ₹40 crore for Spoke ITIs.
- Cluster Funding: One Hub plus four Spokes receives roughly ₹241 crore.
- Component Focus: Smart classrooms, modern labs, digital content, new industry-aligned courses, training of trainers and production centres.
Funds are deposited into an escrow account for each SPV, keeping the money clear and traceable. Payments are tied to yearly use of at least 75% and to progress against the six Disbursement Linked Indicators (DLIs), which are checked by an independent third party, the Indian Institute of Management Indore.
Eligibility
Eligibility is split by institution and by partner status. Both the ITI and the industry partner must meet the conditions set by the state and the scheme rules.
- Government ITIs: Must be state-run institutions chosen by their state or union territory based on local industry demand and skill potential.
- Anchor Industry Partner (AIP): Must be a credible company, industry association or industry-promoted academic institution with established operations in India.
- Criteria: Partners must show financial capacity, relevant sector experience and the ability to help with governance and curriculum design. Small or non-serious operators are not eligible, and any entity debarred by a government agency cannot take part as an Anchor Industry Partner.
Application Process
The application is handled at the state level with industry partners. The steps are given below.
STEP 1 - States and union territories identify the ITIs to be upgraded and define the Request for Proposal (RFP) criteria.
STEP 2 - The state issues the RFP to invite interest from industry partners.
STEP 3 - Applicants submit a proposal that includes a Strategic Investment Plan (SIP).
STEP 4 - The proposals go through technical and financial review.
STEP 5 - Selected proposals are sent to the National Steering Committee (NSC) for approval.
STEP 6 - An SPV is set up as a Section 8 company and an escrow account is opened.
STEP 7 - The SPV signs a Shareholder Agreement (SHA) and a License Agreement (LA).
STEP 8 - The SPV prepares the Annual Operational Plan (AOP) linked to the Strategic Investment Plan (SIP).
STEP 9 - Funds are released in stages as the Disbursement Linked Indicators are met.
Documents
Applicants need a set of documents to take part in the process. The exact templates are given in the official guidelines.
- Company registration and incorporation documents.
- Strategic Investment Plan (SIP) document.
- Expression of Interest (EOI) and RFP response.
- Financial statements showing turnover.
- Debarment declaration certificate.
- Commitment letters for staffing and funding.
- Baseline characteristics and budget allocation templates.
- Shareholders Agreement (SHA) and License Agreement (LA).
- Performance security in the form of a bank guarantee.
- Utilization certificates verified by a Chartered Accountant.
References
FAQ's
What is the goal of PM SETU?
PM SETU aims to upgrade 1,000 government ITIs using a hub-and-spoke model so they become industry-ready centres of excellence by 2047.
How is the SPV structured?
The SPV is a Section 8 company where the Anchor Industry Partner holds 51% shareholding, with the central and state governments holding 24.5% each.
Are there special rules for North-Eastern and Hilly regions?
Yes, these regions can use a relaxed definition for hubs and spokes and get a higher central government funding contribution.
What if a partner is debarred?
Any entity debarred by a government agency is not eligible to take part as an Anchor Industry Partner.
How is progress measured?
Progress is tracked through six Disbursement Linked Indicators (DLIs) that are reviewed by independent third-party verification carried out by the Indian Institute of Management Indore.