PM-SETU Scheme: Bridging the Skill Gap for India’s Youth

Millions of Indian youth pass out of ITIs every year — but many still struggle to find good jobs. Why? Because the training they receive is often outdated. The government has now decided to change this story — with one bold scheme called PM-SETU.

What is PM-SETU?

PM-SETU stands for Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs. It is a flagship skill development scheme of the Government of India, implemented by the Ministry of Skill Development and Entrepreneurship (MSDE).

The scheme was first announced in the Union Budget 2024-25, received Cabinet approval on May 7, 2025, and was formally launched by Prime Minister Narendra Modi at the Kaushal Deekshant Samaroh 2025 in October 2025.

The core idea is simple: transform old, outdated ITIs into modern, industry-ready skill centres — so that students learn what the job market actually needs.

The Skill Gap Problem That PM-SETU Is Finally Solving

India’s ITIs have existed for decades, but many still teach skills that industries no longer require. There is a growing gap between what students learn and what employers want. PM-SETU directly fills this gap by:

• Bringing industry partners into the ITI ecosystem
• Introducing new and emerging courses in sectors like AI, electronics, and green energy
• Upgrading infrastructure — smart classrooms, modern labs, and digital content
• Improving trainer quality through advanced training programmes

Skills, Labs, Industry Links — Everything PM-SETU Brings to Your ITI

Budget and Investment 

The scheme carries a massive investment of ₹60,000 crore, with co-financing support from the World Bank and the Asian Development Bank(ADB). In 2025-26, the budget allocation stood at ₹3,000 crore, scaling up to ₹6,140.50 crore in 2026-27. 

Hub and Spoke Model 

PM-SETU upgrades 1,000 Government ITIs across India using a Hub and Spoke model:

• 200 Hub ITIs — Advanced, well-equipped centres that lead the cluster
• 800 Spoke ITIs — Supported by Hub ITIs for resources, training, and guidance

This model ensures that even ITIs in smaller towns benefit from upgrades.

Industry-Led Governance

A key highlight of PM-SETU is that these upgraded ITIs will be government-owned but industry-managed. Each cluster will be governed by a Special Purpose Vehicle (SPV) — a joint body with representation from:

• Central Government
• State/UT Government
• Anchor Industry Partners (AIPs) — the private sector leads

This ensures training stays relevant to real job market demands. 

Component I & II — Two Pillars of Change

I: Upgradation of 1,000 ITIs with:

• Smart classrooms and modern labs
• Industry-aligned long-term and short-term courses
• Digital learning content
• Career guidance and placement support

II: Capacity building of 5 National Skill Training Institutes (NSTIs) in 

• Bhubaneswar 
• Chennai 
• Hyderabad
• Kanpur
• Ludhiana 

— with National Centres of Excellence to train trainers at a global level.

Who Will Benefit? 

• ITI students across India, especially in smaller cities and towns
• Youth seeking employment in new and emerging sectors
• First-time entrepreneurs and self-employed individuals
• Around 5 lakh graduates who will receive ₹1,000/month stipend for 2 years along with free skill training

Alignment with Viksit Bharat 2047

PM-SETU is not just a skilling scheme — it is India’s investment in its future workforce. The scheme directly supports the Prime Minister’s vision of “Viksit Bharat 2047“ — a fully developed India by its 100th year of Independence. By building a skilled, employable, and future-ready youth, PM-SETU lays the foundation for India’s growth as a global manufacturing and services hub.

Current Status

The first phase of PM-SETU is focused on ITIs in Patna and Darbhanga (Bihar). Of 33 states identified for ITI clusters, 19 states have already issued Expression of Interest documents to onboard Anchor Industry Partners. States like Karnataka, Gujarat, Assam, and Chandigarh have been the early movers.

Summing Up

PM-SETU is one of the most important vocational training reforms India has seen in recent times. It brings together government, industry, and institutions under one roof to create a new generation of skilled workers. If implemented well, it has the power to transform India’s ITI ecosystem and give millions of young Indians the skills — and the confidence — to build a better future.

“PM-SETU will connect India’s youth with global skill demands, opening new opportunities across sectors.” — PM Narendra Modi

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