PM-SETU Component I 2026: ITI Upgradation Scheme, ₹60,000 Crore Outlay & Details

At a glance

About the scheme

Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) Component I aims to elevate vocational training standards across India. Implemented by the Directorate General of Training alongside State Governments and industry leaders, the initiative adopts a Hub-and-Spoke model comprising 200 Hub ITIs and 800 Spoke ITIs. By setting up Special Purpose Vehicles managed by Anchor Industry Partners, the scheme introduces high-demand modern courses, advanced machinery, incubation centres, and placement linkages to ensure trainees meet real-world industrial requirements.

Benefits

• Upgradation of 1,000 Government ITIs (200 Hub ITIs and 800 Spoke ITIs) with modern infrastructure and equipment.
• Total scheme financial outlay of ₹60,000 crore over five years, shared among the Centre (50%), States (33%), and Industry (17%).
• Maximum investment outlay of up to ₹81 crore for each Hub ITI and up to ₹40 crore for each Spoke ITI.
• Overall indicative investment of ₹241 crore for each cluster comprising one Hub and four Spoke ITIs.
• Hub ITIs introduce an average of four new courses and upgrade ten existing trades; Spoke ITIs introduce two new courses and revamp eight existing trades.
• Introduction of flexible short-term courses (3 to 6 months), long-term diplomas, executive education, and Training of Trainers (ToT) facilities.
• Enhanced student support including placement linkages, apprenticeships, on-the-job training, counselling, and remedial foundational classes.
• Establishment of production centres, maker spaces, and incubation centres at Hub ITIs.
• Special funding arrangements for North-Eastern and Hilly States (74.7% Centre, 8.3% State, 17% Industry) and UTs without legislature (83% Centre, 17% Industry).

Who can apply (eligibility)

• ITIs must be Government Industrial Training Institutes selected by their respective State or Union Territory based on local industry demand.
• Anchor Industry Partners must be credible companies or manufacturers with established business operations in India (including PSUs).
• Industry associations, consortia, industry-led foundations, or academic institutions promoted by industry are also eligible as Anchor Industry Partners.
• Applicants must possess the managerial and technical capability to guide governance, curriculum design, and training delivery.
• Applicants must satisfy state-specified minimum eligibility thresholds relating to annual turnover, employee headcount, and sectoral experience.

Who cannot apply

• Entities debarred by any government agency are disqualified from participating.
• Small or non-serious operators failing to satisfy turnover, employee, or sector criteria defined by States or Union Territories are not eligible.

Documents required

• Expression of Interest (EOI) Document
• Request for Proposal (RFP) Response
• Strategic Investment Plan (SIP) in the prescribed format
• Company Registration and Incorporation Documents
• Audited Financial Statements verifying required turnover
• Documentation verifying the total number of employees
• Debarment Declaration Certificate confirming no government blacklisting
• Commitment Letters from the State Government regarding staffing, funding, and regulatory reforms
• Letters of Collaboration and MoUs with industry partners for employment and apprenticeships
• Baseline Characteristics Document of Hub and Spoke ITIs (Template 1)
• Budget Allocation Documents of the last three financial years (Template 2)
• Five-Year Investment Plan Budget (Template 3)
• Performance Indicators Documentation (Template 4)
• Implementation Gantt Chart (Template 5)
• Human Resource Plan and credentials of proposed SPV CEO and management team
• Shareholders' Agreement (SHA) and Licence Agreement (LA)
• Performance Security (Bank Guarantee from a Scheduled Bank)
• Annual Operational Plan (AOP)
• Asset Register and Chartered Accountant certified Utilisation Certificates

How to apply

1. 1The State or Union Territory identifies Government ITIs and publishes a Request for Proposal (RFP) specifying eligibility criteria.
2. 2Eligible Anchor Industry Partners respond to the RFP and prepare a comprehensive Strategic Investment Plan (SIP).
3. 3The applicant submits the SIP along with required institutional, financial, and operational documents to the State Government.
4. 4The State Government reviews the proposals through pre-qualification, technical evaluation of the SIP, and financial assessment.
5. 5Selected proposals are recommended by the State and submitted to the National Steering Committee (NSC) for final approval.
6. 6Following approval, a Special Purpose Vehicle (SPV) is incorporated as a Section 8 company, and the Shareholders' Agreement and Licence Agreement are executed.
7. 7An escrow account is opened in a scheduled commercial bank to receive fund contributions from the Central Government, State Government, and Industry.
8. 8The SPV submits its Annual Operational Plan (AOP) and receives funds in phased tranches to implement modern training, machinery procurement, and course delivery.

Frequently asked questions