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Bridging Skills for 2047: The PM-SETU

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The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) scheme represents a landmark initiative by the Ministry of Skill Development and Entrepreneurship (MSDE) to reimagine vocational education in India. Rooted in the vision of a “Viksit Bharat 2047”, the scheme seeks to modernize and elevate the Industrial Training Institutes (ITIs) and National Skill Training Institutes (NSTIs) into aspirational, industry-aligned institutions that produce highly employable youth.

Background: The 2008 Craftsmen Training Scheme and Its Limitations
The genesis of India’s formal vocational training ecosystem lies in the Craftsmen Training Scheme (CTS), operational since 2008 under the Directorate General of Training (DGT). While the CTS offered 169 trades aligned with the National Skills Qualification Framework (NSQF), it was largely government-managed, with limited industry participation. The infrastructure remained outdated, curricula were slow to adapt to evolving industry needs, and placement outcomes were inconsistent. Despite the presence of 33 NSTIs (including 19 for women), the system lacked the agility and responsiveness required to meet the demands of a rapidly transforming economy.

Introduction to PM-SETU: A Paradigm Shift
PM-SETU introduces a transformative model that is government-owned but industry-managed. With a total outlay of ₹60,000 crore over five years—shared among the Central Government (₹30,000 crore), State Governments (₹20,000 crore), and Industry (₹10,000 crore)—the scheme is structured into two components:

  • Component I focuses on upgrading 1,000 Government ITIs through a Hub-and-Spoke model, where 200 ITIs serve as hubs managing 800 spoke ITIs.
  • Component II aims to augment five NSTIs (Bhubaneswar, Chennai, Hyderabad, Kanpur, Ludhiana) into National Centres of Excellence (NCOEs), with global partnerships and advanced training capabilities.

The scheme is co-financed by the Asian Development Bank and the World Bank through result-based loans, ensuring accountability and performance-linked funding.

Operational and Governance Model
The scheme introduces Special Purpose Vehicles (SPVs) to manage clusters of ITIs. These SPVs can be industry-led or state-led, depending on the availability of credible Anchor Industry Partners (AIPs). Industry-led SPVs hold a 51% share, with the remaining 49% equally divided between the Centre and State. SPVs have full autonomy over curriculum design, trainer recruitment, financial operations, and infrastructure upgrades. Governance is ensured through a tripartite agreement comprising a Shareholders’ Agreement (SHA) and a License Agreement (LA).

At the national level, a Steering Committee chaired by the Secretary, MSDE, provides policy direction, while State Steering Committees oversee implementation, approve Strategic Investment Plans (SIPs), and monitor progress. Independent Monitoring Agencies (IMAs) verify milestones and ensure transparency.

Pitfalls Identified in the Scheme Design
Despite its robust framework, PM-SETU could have several potential pitfalls:

  • Complex Governance Structure: Multi-tiered committees and overlapping responsibilities may slow decision-making and create bureaucratic bottlenecks.
  • Dependence on Industry Participation: The success of clusters hinges on credible AIPs. Lack of interest or capacity could derail implementation.
  • HR Integration Challenges: Coexistence or deputation of government staff with SPV personnel may lead to role ambiguity and resistance to change.
  • Monitoring Burden: KPI-based fund release and performance tracking require sophisticated systems, which may strain under-resourced states.
  • Equity and Access Concerns: Risk of urban-centric clusters and exclusion of remote regions if not carefully planned.
  • Digital Divide: AR/VR tools and Learning Outcome Management Systems (LOMS) may not be accessible in low-connectivity areas.
  • Curriculum Fragmentation: Excessive customization by SPVs could lead to inconsistency in training quality and certification standards.
  • Sustainability Post-Scheme: Long-term viability depends on continued industry engagement and revenue generation.

Mitigation Strategies in the New Scheme
To address these challenges, PM-SETU incorporates a comprehensive mitigation plan:

  • Strengthening SPV Governance: Clear role definitions, onboarding programs for ITI staff, and change management training are mandated.
  • Ensuring Timely Fund Flow: Streamlined KPI tracking and technical assistance for SIP and AOP preparation are provided.
  • Standardizing Curriculum Framework: A core curriculum is mandated across ITIs, with flexibility in specific modules. All course approvals are routed through CSTARI and NCVET.
  • Planning for Sustainability: SPVs are encouraged to develop revenue-generating activities such as production centers, fee-based courses, and consultancy services.
  • Bridging the Digital Divide: Infrastructure grants and digital literacy programs are planned for ITIs in underserved regions.
  • Promoting Inclusive Cluster Selection: Clusters in NE, hilly, and tribal regions are prioritized, with relaxed hub-spoke definitions and gender/social equity targets.
  • Monitoring Industry Commitment: Performance-linked clauses in SPV agreements and multi-industry consortia are encouraged to ensure sustained engagement.

Conclusion
PM-SETU marks a bold and strategic shift in India’s skilling landscape. By integrating industry-led governance, modern infrastructure, flexible curricula, and robust monitoring mechanisms, it aims to create a future-ready workforce aligned with national development goals. While the scheme is ambitious and complex, its design reflects a deep understanding of past shortcomings and a commitment to inclusive, sustainable, and high-impact transformation.

The Big Leap – To take the plunge or Not!

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For a legacy technical school, transforming itself into a Strategic Business Unit (SBU) is no longer an option, but a dire necessity in today’s rapidly changing education and employment ecosystem.

Milking the advantage of legacy of 6 decades of credibility, alumni network, and trust, offer a strong foundation to scale skill development initiatives. Couple it with Industry Alignment skill development as SBU, it allows the institution to align its offerings with industry 4.0 needs (AI, robotics, green jobs, digital skills etc). Most importantly revenue diversification by positioning itself as a SBU creates sustainable income streams beyond traditional programs. It also allows a formal and sustained engagement process with Government & corporates for CSR/funding Partnerships. Last but not the least, without diluting its core values which is lasting Social Impact and inclusivity, it direct contributes to employability, entrepreneurship, and livelihoods for youth, women, and underserved communities.

A seismic shift like this doesn’t come without some risks that needs to be hedged. A cultural makeover like moving from a purely academic mindset to a market-driven SBU approach may face internal (and market) resistance. It also exposes legacy institutions to competition demanding high levels of agility, aggressiveness, and tech-savviness, which may appear daunting but inevitable challenge that has to be overcome. Additionally, safeguards need to be in place to address risk of overdependence on short term funded projects that may end up affecting long term viability. Next challenge is adaptability of the most critical resource – the Faculty – they need to change the mindset, need upskilling in pedagogy and technology to address pressing needs. The organisation may also run into most critical Risk (according to me) Risk of Brand Dilution. Without clear strategic intent and process to support the intent, the core academic reputation could get overshadowed.

In pursuing the Philosophy of “Business unit is supposed to do business”, the change managers of “not for profit” tend to become ruthless to achieve the business goals. Any organisation is about humans, not just pillars, walls, ceiling, equipment or machineries. Weight of the platform or launchpad for the transforming organisation is borne by those humans who toiled and sweated for it for years, so much so that an important organisational value of being humane, is forgotten. For a legacy Not-For-Profit, even at a signficant cost to the organisation, this is a core value. When Humans become just a line item in the spreadsheet, it manifests as responses and loss of goodwill which runs risk of a spiralling effect if not addressed by change managers

The transition of this legacy institution into a Strategic Business Unit is a painful but critical and necessary evolution. It’s about moving from a reactive to a proactive stance, leveraging decades of goodwill and expertise to build a sustainable, future-ready model. By embracing a business-first approach, the school can ensure its long-term viability and, more importantly, continue its mission of social impact by providing students with the skills they need to secure jobs and livelihoods in a competitive landscape. This strategic shift will not only honor the institution’s history but also position it as a Center of Excellence in Skills, setting a new standard for educational impact and relevance.

#IndiaFightsCorona – Convalescent Plasma Therapy

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While I am chronicling my journey as a COVID19 Volunteer for Government of Karnataka’s battle against the pandemic firstly as Vice-Chaiman of the Corona Sainika State Task Force and later as Chief Citizen Coordinator in the Neighbourhood Home Quarantine Watch and Care (NHWC) Team, an unique citizen participation model conceived by Government of Karnataka. It was a exhilarating journey, ups and down, Tears of Joy and ones of frustration and disappointment, proud achievements and some miserable failures, crossing paths of Amazing human beings and some not so amazing ones, some a story full of life and also a couple of losses. A journey that needs to be chronicled and told to the world.

While it is in progress, on popular demand I am just collating all the tweets from my handle on the Convalescent Plasma Therapy, that has reference to many research material and experiences. Here is the first part of the series on #IndiaFightsCorona