PM-SETU and the New Push for ITI Reform
The Union Budget 2026–27 has placed a major bet on vocational education by allocating Rs 6,000 crore to the Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) . Launched on October 4, 2025, the scheme has emerged as the largest programme under the Ministry of Skill Development and Entrepreneurship , which has an overall budget of about Rs 9,800 crore .
PM-SETU is a centrally sponsored initiative aimed at transforming the Industrial Training Institute (ITI) ecosystem, which plays a crucial role in producing job-ready, technically skilled workers for India’s manufacturing and services sectors.
Scale of Public Spending, Weak Job Outcomes
India already spends heavily on ITIs. According to a 2023 report by NITI Aayog , the government incurs around ₹10,000 crore annually to operate nearly 3,500 government ITIs . In addition, ₹2,200 crore was spent under the Skill Strengthening for Industrial Value Enhancement (STRIVE) scheme, which concluded in 2024.
Despite this sustained investment, placement outcomes remain alarmingly poor. Of over 4.14 lakh trainees , only 405 candidates secured placements — a placement rate of just 0.09% . These figures have raised serious concerns about the effectiveness of India’s vocational training pipeline.
Why ITIs Face Structural Challenges
Unlike schools or universities, ITIs are expected to deliver immediately employable, sector-specific skills . This requires trainers with current industry knowledge, exposure to modern production processes, and the ability to adapt teaching methods to evolving technologies.
However, both government and private ITIs face a persistent shortage of adequately skilled instructors . Many trainers lack recent industry experience, while curricula often lag behind technological changes. Weak industry linkages further reduce the relevance of training, resulting in a mismatch between skills taught and labour market demand.
What PM-SETU Proposes to Change
PM-SETU has been designed with two core components:
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Upgradation of 1,000 ITIs across the country with modern infrastructure, updated courses, and stronger industry partnerships
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Development of five National Skill Training Institutes (NSTIs) as centres of excellence for advanced skilling and trainer capacity building
Together, these components carry a proposed outlay of ₹60,000 crore over five years , signalling a long-term commitment to vocational reform.
Will More Money Translate Into More Jobs?
While PM-SETU addresses long-acknowledged weaknesses — such as outdated infrastructure and limited trainer development — experts caution that funding alone will not guarantee better employment outcomes . Success will depend on deeper reforms, including industry-led curriculum design, performance-linked accountability for institutes, and robust tracking of placement outcomes.
If effectively implemented, PM-SETU could help bridge India’s skills gap at a time when manufacturing, infrastructure, and green technologies are expanding. If not, it risks repeating the pattern of high expenditure with limited returns in employment generation.
Exam-Focused Key Points
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PM-SETU was launched on October 4,
Month: Current Affairs - February 06, 2026
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