Skill Development

Slow Pace, Deep Faultlines: Getting PM-SETU on Track

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This is presented as a constructive observation of the PM-SETU (Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs) scheme. While it is admittedly early days since launch, the significantly slow pace of implementation is deeply worrisome, and extensive discussions with various ground-level stakeholders fail to inspire confidence regarding long-term execution. (Current status of PM-SETU implementation towards the end of this article)

The scheme was originally designed to completely revamp vocational training across India by restructuring 1,000 Government ITIs into a Hub-and-Spoke model comprising 200 Hubs and 800 Spokes. The core objective was to switch from a rigid government-led training style to an industry-managed system where Anchor Industry Partners (AIP) hold a 51% stake in a Special Purpose Vehicle to run the clusters, while government funds up to 83% of the costs. However, rollout has hit significant roadbumps and progress is moving much slower than acceptable. The scheme remains stuck firmly in pre-implementation and tendering stages as states struggle to finalize Requests for Proposals from corporate entities. Beneath this sluggishness lie deep, structural defects in scheme design.

Bureaucratic Friction and Administrative Gridlock

The 51:49 public-private partnership structure sounds good on paper, but it creates intense administrative gridlock. Corporate agility is consistently bottlenecked by traditional, slow-moving government approval cycles. State governments have had to frequently ask the Ministry of Skill Development for clarifications on how to frame agreements, creating massive administrative drag that stalls ground-level execution.

Non-Standardized Portability and Localized Syllabi

Because each Anchor Industry Partner customizes curriculum to fit its own specific factory needs, a syllabus created in Karnataka might differ completely from one in Haryana. If these customized courses do not align perfectly with the National Skill Qualification Framework, student certificates lose value if graduates move out of that specific industrial cluster, severely limiting interstate labour mobility.

Dual Competence Requirements for the Oversight Body

A major institutional weakness is lack of a specialized governance structure capable of managing this transition. An oversight body tasked with managing a massive transformation like PM-SETU cannot function merely as an auditing entity or a bureaucratic ledger-keeper. Because the public-private structure of Special Purpose Vehicles relies on complex escrow accounts and performance-linked milestones, oversight body requires deep financial competence to track milestone-based disbursements, audit asset monetization strategies, and verify whether valuations attached to corporate contributions are fair.

Equally vital is domain delivery competence. The governance framework must include professionals from emerging technical sectors capable of evaluating pedagogical quality, monitoring technology lifecycles, and ensuring that customized curricula maintain alignment with the National Skill Qualification Framework. Without this dual expertise of financial stewardship and deep vocational understanding, the oversight mechanism risks reducing its function to checking boxes rather than ensuring genuine instructional quality and wage-verified placements.

Critical Deficit in Trainer Ecosystems and Pedagogical Gaps

The most severe operational bottleneck threatening PM-SETU is acute non-availability of qualified trainers, a crisis that extends all the way up to master trainers responsible for training other instructors. Installing advanced robotic arms, automation kits, and CNC machines is entirely redundant without personnel capable of teaching students how to operate them. India faces a massive structural deficit in instructors who understand modern technologies like EV maintenance, AI-driven logistics, and smart manufacturing.

This human resource vacuum cannot be solved simply by importing personnel from factory floors. While industry experts possess deep technical knowledge, they frequently lack the vital pedagogical skills required to manage classrooms, design curricula, and break down complex industrial concepts for adolescent learners. Teaching is an entirely different capability set than manufacturing. Conversely, existing ITI faculty lack exposure to modern automation, leaving a massive gap between industrial reality and classroom instruction. The Training-of-Trainers framework within PM-SETU is lagging far behind infrastructure targets, creating a situation where high-tech labs sit idle because there is a total absence of individuals who can both operate the technology and teach it effectively.

Corporate Dilemma and Capitalist Paradox

The reliance on private companies to co-invest and manage these ITI clusters has exposed a fundamental capitalist paradox where Anchor Industry Partners face zero incentive to spend corporate resources to act as public charity, especially if it risks creating talent pipelines for direct rivals. Because ITI graduates are free agents, Anchor Industry Partners cannot legally force them to stay. A competitor who spent zero rupees on training can simply offer these newly skilled graduates slightly higher salaries and steal them away, forcing the investing company to subsidize its competitor’s HR department. Furthermore, teaching cutting-edge Industry 4.0 skills requires exposing internal operational workflows and proprietary tools, creating massive intellectual property risks regarding leakage to rivals. Finding top-tier industrial partners willing to invest heavily in remote, rural Spoke ITIs is also incredibly difficult, as most industrial giants remain concentrated around major manufacturing zones.

Strategic Perks Designed to Attract Private Investment

To convince Anchor Industry Partners to take these risks, the scheme pitches specific operational advantages. While companies cannot legally lock students in, they get exclusive, year-round access through on-the-job training inside corporate facilities. By graduation, these students are fully integrated into company culture and machinery, requiring zero onboarding time. Additionally, major corporations rely on hundreds of Micro, Small, and Medium Enterprise vendors. By managing a PM-SETU hub, an Anchor Industry Partner can train youth who will work for their supply chain vendors, which directly raises component quality and reduces defect rates. Finally, setting up a state-of-the-art training center independently requires 100% private funding, whereas PM-SETU provides up to 83% government funding for capital expenditure, allowing companies to build high-tech training ecosystems for a fraction of market price.

Policy Revisions Required to Accelerate Progress

To get PM-SETU back on track, government needs to implement structural course corrections that address both administrative delays and corporate anxieties. The Ministry should allow Anchor Industries to sign reasonable, legally binding apprenticeship-to-hire contracts where students agree to work for the partner firm for 18 to 24 months post-graduation in exchange for subsidized education. To deter poaching, competing firms hiring a graduate within two years of graduation should be mandated to pay training clawback fees directly to the original investing Anchor Industry Partner.

To resolve the teaching crisis, the government must collaborate with central universities and corporate partners to launch specialized pedagogical diplomas for engineers, transforming industry experts into certified educators. Funding must be aggressively diverted into mandatory corporate training stints for existing ITI faculty. To solve regional disparity, government should offer higher fiscal incentives or tax breaks for companies managing remote Spoke ITIs. Furthermore, the Ministry must mandate a core 70% standardized syllabus aligned with national frameworks, confining industry-specific training to the remaining 30% to ensure certificate portability. Finally, state-level single-window clearance channels must be created to fast-track corporate entity formation, and funding milestones should be strictly tied to actual graduate placement wages rather than mere enrollment numbers.

CURRENT STATUS

Overview of the PM-SETU Rollout

The implementation of the Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) scheme has gained momentum across India, driven by the Ministry of Skill Development and Entrepreneurship (MSDE) and the Directorate General of Training (DGT). According to official parliamentary and Ministry updates, currently 19 States and Union Territories have officially floated Requests for Proposals (RFPs) and tenders to onboard industry expertise, while 32 States/UTs have formed State Steering Committees to oversee the rollout. These procurement notices primarily target Anchor Industry Partners (AIPs) willing to co-invest and co-manage institutional clusters under a modernized Hub-and-Spoke model, reshaping vocational training through public-private collaboration. While nearly 20 states have crossed the hurdle of initiating these tenders, the scheme remains stuck in this exact stage. Publishing the RFP is proving to be the easy part, finding private corporations willing to actually bid on them and finalize the 51% stake agreements is where the current delay lies.

State-Specific Tender Actions

Several state governments have moved swiftly into the active bidding phase with substantial financial outlays. Haryana has issued an RFP for the Chhara ITI Cluster Upgradation in Jhajjar with a massive project outlay of ₹241 Crore, alongside onboarding project monitoring consultancies. Rajasthan’s Directorate of Technical Education has aligned its tenders with a similar ₹241 Crore per cluster framework, utilizing a structured funding split where the state and center cover 83% of costs, leaving a mandatory 17% (approximately ₹41 Crore) for the winning industry bidder. In the northeast, Assam has invited bids for the Guwahati Cluster, comprising ITI Guwahati as the hub and four surrounding spokes with an estimated project value of ₹281 Crore. Meanwhile, Andhra Pradesh has released highly localized, cluster-specific RFPs targeting key hubs like Kurnool, Dhone, Nellore, and Vijayawada to establish specialized training ecosystems.

Cluster Management and Upgradation Mandates

The technical and financial mandates embedded within these state tenders reflect a uniform strategy to decentralize ITI governance and future-proof the curriculum. Winning bidders across states like Odisha, Uttar Pradesh, Uttarakhand, and Tripura are required to establish a Section 8 non-profit Special Purpose Vehicle (SPV), maintaining a 51% industry stake against a 49% government share to ensure operational autonomy. Furthermore, the RFPs strictly bind the selected partners to upgrade infrastructure and introduce the DGT’s newly curated, future-ready courses. This ensures that the upgraded clusters move away from legacy trades and pivot aggressively toward high-demand sectors, including artificial intelligence programming, drone technology, green hydrogen production, semiconductor manufacturing, and 5G infrastructure.

Onboarding Status of Anchor Industry Partners (AIP)

The rollout of the ₹60,000-crore PM-SETU scheme has officially transitioned from the bidding phase to execution, with Andhra Pradesh becoming the first state in India to onboard an Anchor Industry Partner. This milestone was formalized by the Ministry of Skill Development and Entrepreneurship (MSDE) during the third National Steering Committee meeting.

First Onboarded Partner and Pilot Cluster

The inaugural Strategic Investment Plan (SIP) approved under the scheme belongs to the consortium of ArcelorMittal Nippon Steel India (AM/NS India) and its academic partner, the New Age Makers Institute of Technology (NAMTECH). This industry partnership has been officially onboarded to manage and transform the Visakhapatnam ITI Cluster in Andhra Pradesh, backed by a project cost of ₹200.21 Crore. This cluster will serve as the national blueprint for the hub-and-spoke model.

Current Pipeline and Approvals

While AM/NS India is the first to achieve final, formal clearance to begin operations, several other major industry leaders are heavily engaged in the final stages of the selection process. Companies like Hindustan Aeronautics Limited (HAL), Hero MotoCorp, Bajaj Auto, and ITC Limited have actively submitted proposals. With 12 states having already closed or nearing the closure of their initial Request for Proposal (RFP) timelines, the central ministry expects a wave of additional AIP onboardings and cluster approvals to be cleared in the coming months.

References

  1. Ministry of Skill Development and Entrepreneurship (MSDE) Parliamentary Replies: Unstarred Question responses in both the Lok Sabha (Question No. 4939 & 5928) and the Rajya Sabha (Question No. 3794) answered in March 2026.
  2. Press Information Bureau (PIB) Delhi: The Ministry reiterated these exact numbers in official government press releases titled “Operationalisation of PM–SETU” and “ITI Upgradation Under PM SETU”, issued by the Press Information Bureau.

Decoding the Regulatory Divide: Systemic Flaws and Global Benchmarks in India’s Skilling Ecosystem

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By N Suresh
Possesses 38 years of professional experience across assorted industries and is a direct product of the Dual system of education, supplemented by Master’s degrees from the traditional University system. A close observer of Skill India’s advancements for the past 42 years, he has extensively tracked the European and Australian TVET sectors, drawing upon 15 years of direct personal experience in this space.

National Council for Vocational Education and Training (NCVET) was operationalized by subsuming National Council for Vocational Training (NCVT) and National Skill Development Agency (NSDA). This consolidation aimed to unify fragmented Technical and Vocational Education and Training (TVET) architecture. While unified policy control has scaled up, structural deficiencies in monitoring Awarding Bodies (ABs) and Assessment Agencies (AAs) persist. Shifting from volume-driven compliance to outcome-based field execution remains a critical challenge.

Core Flaws in the NCVET Framework

Spatial Overreach and Paper Capacities

Regulatory frameworks grant pan-India jurisdictions to testing entities based on administrative volume. Agencies secure multi-state clearances by presenting databases of freelance Subject Matter Experts (SMEs), multilingual question banks, and registered proctors. This desktop licensing model assumes that mathematical scale translates into local execution capability. In practice, a massive database of freelance examiners does not guarantee logistical infrastructure, quality control, or industry connections required to deploy genuine assessments in remote or rural districts.

Numerical Volume Contradiction

A major structural loophole in the pan-India licensing model is the reliance on absolute numerical thresholds without geographical distribution mandates. For example, an agency can secure national jurisdiction status purely by demonstrating a volume metrics threshold, such as training & assessing 75,000 candidates within a single year. Though the current document June 2025 says “at-least five (05) States/ UTs representing at-least three(03) Regions of India (Clause 2.2.1 b (iii))” a cursory glance of the list of Dual Body indicates many who are a single state operations who qualified only because of the number trained and certified. Fundamentally such framework fails to account for where these training and assessments occur. An entity can train and evaluate the entire volume of 75,000 candidates within a single geography (state or region). Despite having zero operational footprint, zero infrastructure, and zero regional language capability in the remaining states or Union Territories, the entity receives a nationwide operational mandate.

This distortion creates severe operational challenges across the skilling value chain:

  • Clustering Illusion: Agencies naturally centralize operations in high-density urban clusters to minimize logistical costs, avoiding remote, hilly, or border regions while maintaining national certification status.
  • Sub-Contracting Vulnerabilities: When single-state operators win nationwide public procurement tenders, they frequently scramble to sub-contract ground execution to unverified local freelancers, weakening process monitoring.
  • Linguistic Disconnect: Achieving high volume metrics in one region does not ensure an agency possesses the linguistic literacy or contextual subject expertise required to evaluate candidates in culturally diverse states.

The current guideline treats organizational capacity as a product of physical geography rather than evaluating the institutional and digital scale of the applying entity. It also stifles cross-border mobility and locks out highly competent regional players. For example, a top-tier skilling institute based in Noida (Uttar Pradesh) that has successfully trained thousands of students cannot apply to be an AB in neighboring Delhi or Haryana unless they already have historical, recorded numbers inside those specific state borders. Also, if an organization applies for recognition in more than one state (but less than PAN India), the required prior experience (number of trainees/assessments) is a strict mathematical summation of the individual state requirements. The same applies to financial turnover requirements (Section 4.1.3.c).

Coming specifically to Guidelines for Diploma Qualifications (Gazette)

Batch Sizing Flaw: Rigid Capacity Caps

According to Section 8.7.1, the guidelines impose a strict mandate on how institutions can operate their batches:

  • Maximum Cap per Batch: The instructional area is limited to a batch size of a maximum of 30 students per batch.
  • Single Batch Restriction: By default, an institution is eligible for only one batch per Diploma or Diploma (Advanced) Qualification.

Key Operational Consequences

This rigid structure introduces three major flaws into the training ecosystem:

  • Severe Scale Limitations: Capping a program at a single batch of 30 students severely restricts a well-equipped, highly reputed institution from scaling up its successful vocational programs to meet market demand.
  • Disincentivizes Growth: Even if an institution has a proven track record, high placement rates, and robust infrastructure, it is bottlenecked by the default “one batch per qualification” rule.
  • Regulatory Dependency for Expansion: To bypass this limit, institutions must prove “exceptional circumstances” to NCVET to get additional batches allocated. This introduces administrative red tape and slows down execution.

While this strict sizing is meant to impose a control on 1:30 faculty-student ratio for quality assurance, it creates an institutional bottleneck that hampers the broader goal of rapidly spreading vocationalization across India.

However, there is an exception clause on how an Entity Secures Extra Batches from NCVET

As per the Gazette: “…under exceptional circumstances, institutions with proven capacity and reputation may be considered for the allocation of additional batches by NCVET.”

To deviate from the 1-batch rule and increase annual trainee intake, an institute must formally justify its capacity to NCVET by proving:

  1. Parallel Infrastructure: Showing that they possess entirely separate, duplicate sets of labs and workshops so that Batch A and Batch B do not fight over the same CNC machines or robotics kits.
  2. Dedicated Faculty Strength: Proving a strict 1:20 or 1:30 trainer-to-trainee ratio for each extra batch requested, with full-time instructors listed on the portal.
  3. Linear Multiples: If NCVET approves an entity for 3 batches of an approved Diploma qualification, system locks their portal limits to exactly 3 × 30 = 90 trainees for that academic intake year.

In my experience intake limit (& even Jurisdiction) is observed more in violation than compliance, in the absence of actual field audit.

Field Verification Deficit

The recognition pipeline prioritizes initial documentation screening and committee presentations over active field verification. Once bilateral or tripartite agreements are executed, oversight shifts to self-regulation portals and periodic desk audits. NCVET lacks dedicated regulatory inspectorates to perform unannounced, on-site audits during active testing cycles. Without surprise field validations, standard operating procedures cannot be actively enforced, leaving the system exposed to systemic process compromises.

Structural Interest Conflicts

Allowing dual recognition enables single corporate entities to act as both Awarding Bodies and Assessment Agencies. While this design minimizes operational friction within training cycles, it reduces institutional separation between delivery and certification. When training providers and evaluators operate under shared management networks, robust external auditing becomes essential, yet remains unaddressed by current oversight mechanisms.

Technical and Operational Bottlenecks

Centralizing operations through the KaushalVerse Portal and Academic Bank of Credits (ABC) has faced persistent technical debt. Interoperability issues between older legacy systems and centralized public portals create administrative blockages. Furthermore, rigid National Skills Qualification Framework (NSQF) alignment timelines cause structural bottlenecks. When specialized training modules expire, bureaucratic renewal delays disrupt active training batches, slowing down ecosystem agility.

Performance Analysis Since Inception

Macroeconomic restructuring has standardized long-term and short-term vocational parameters, but grass-roots execution quality varies significantly.

Performance DomainStrategic Impact AreasSystemic Outcomes
Regulatory UnificationConsolidated NCVT and NSDA portfolios under unified guidelines.High success in eliminating conflicting administrative norms.
Credit IntegrationCo-authored National Credit Framework (NCrF) to establish academic equivalence.High success in creating clear pathways between vocational and mainstream education.
Institutional ExpansionExtended Deemed Awarding Body status to Central Universities and Higher Education Institutions.Moderate success in expanding formal skilling footprints.
Quality ControlManaged testing operations via self-reported portal data and remote tracking.Low success; persistent exposure to proxy testing and unverified field metrics.
Market ResponsivenessRouted curriculum updates through multi-tiered screening panels and committee approvals.Low success; slow deployment of fast-evolving green energy and technology modules.

Global Governance Paradigms: ASQA and Germany

Global VET frameworks position regulatory accountability on operational sites rather than documentation matrices, explicitly separating localized capacity from raw scale.

Australia (ASQA): Risk-Based Performance Sampling

The Australian Skills Quality Authority (ASQA) regulates Registered Training Organisations (RTOs) by checking operational evidence instead of corporate policy files. Auditors sample live portfolios, cross-verify completed evaluation patterns, and conduct direct interviews with candidates and trainers.

Crucially, ASQA prevents the numerical volume trap by treating geographic expansion independently. Hitting high enrollment numbers in a home state does not grant automatic national access. RTOs must file a specific Scope Expansion Application for every new territory, proving local physical infrastructure and compliant local delivery sites prior to approval.

Germany: Decentralized Chamber Architecture

Germany’s Dual VET system transfers monitoring duties away from central government bodies to regional industry structures: Chambers of Industry and Commerce (IHK) and Chambers of Crafts (HWK). Local companies must clear physical inspections of workspace safety and trainer qualifications to participate. Employers train candidates but are legally prohibited from testing them. Final examinations are conducted independently by regional tripartite boards comprising employers, teachers, and union representatives, using local peer pressure to protect certification integrity.

Structural Governance Comparison

Operational FeatureNCVET Model (India)ASQA Framework (Australia)Dual VET Architecture (Germany)
Primary Audit MetricPre-Recognition Verification: Data counts, online forms, and portal declarations.Performance Auditing: Evaluation of active learner files and live observations.Co-Regulation: On-site checks of workplaces by regional industry peers.
Territorial AuthorizationAutomated national jurisdiction based on cumulative volume thresholds.Location-specific authorization requiring independent local proof for every territory.Region-bound operational permits controlled strictly by local industry chambers.
Evaluation WorkforceFreelance assessors hired via non-exclusive private registries.Institutional assessors subject to strict federal validation standards.Tripartite panels comprising local industry, labor, and academic experts.
Investigation TriggersScheduled renewals or formal stakeholder complaints.Data-driven risk forecasting and random target selections.Continuous local monitoring by permanent regional advisors.

Realizing Ground-Truth Accountability

NCVET has established macro-policy structures, credit articulation rules, and national skilling frameworks. However, its reliance on remote, desktop-based licensing weakens ground-level execution. Transitioning to risk-based performance sampling, introducing geographical dispersion thresholds (requiring minimum volume spread across diverse states rather than single-cluster concentrations), or utilizing regional industry networks could address these gaps. Until verification frameworks shift from checking paper database registries to conducting live, independent field audits, true capability will remain separate from compliance documentation.

References

  1. National Council for Vocational Education and Training. (2020). Guidelines for Recognition and Regulation of Assessment Agencies. Ministry of Skill Development and Entrepreneurship, Government of India.
  2. National Council for Vocational Education and Training. (2024). Guidelines for Diploma Qualifications in Vocational Education & Training and Skilling. Notification. Gazette of India.
  3. National Council for Vocational Education and Training. (2023). Revised National Skills Qualification Framework (NSQF) Notification. Gazette of India.
  4. Australian Skills Quality Authority. (2025). Regulatory Risk Framework and Performance Assessment Methodology. Commonwealth of Australia.
  5. Federal Ministry of Education and Research (BMBF). (2024). Report on the Vocational Education and Training (VET) System in Germany. Vocational Training Act (BBiG) Compliance Standards.
  6. National Council for Vocational Education and Training. (2026). Compendium of NCVET Policies, Guidelines, and Digital Migrations (KaushalVerse Framework). Ministry of Skill Development and Entrepreneurship, Government of India.

Graduate Unemployability – Humanware or Hardware Issue?

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This article comes as my take after I read an article on a popular Skill Development and News aggregator Platform on Graduate Employability. The graduate unemployability crisis has a hidden root cause. While we focus on hardware of education, we keep ignoring the human-ware. Shiny campuses and high-speed Wi-Fi mean nothing if the person at the front of the room is disconnected from the modern world. We are producing lakhs of graduates who aren’t job-ready because you cannot inspire excellence if you haven’t lived it.

Infrastucture Remain in OEM Packing Until it is Scrapped
PC: Gemini

In many Indian colleges, teaching is a fallback, not a choice. Faculty often teach subjects like cloud computing or digital marketing without having spent a single day in a tech firm. It’s like trying to teach someone to swim using a textbook in a dry room. No matter how modern the syllabus, a teacher just reading PowerPoint slides makes employability a distant dream.

Bridging the Gap: A Practical Roadmap

To fix the system, we must redefine job-description and titles of a Guru in modern times:

To revitalize the educational landscape, we must bridge the gap between ivory towers and real world. This begins by democratizing expertise through Professor of Practice model, rather than limiting industry veterans to elite institutions like IITs, we should bring those with two decades of on-the-ground experience into every Tier-1, Tier-2 and Tier-3 colleges.

To keep classroom knowledge from stagnating, Industry Sabbaticals should become a standard requirement. Teachers need to immerse themselves in corporate environments for several months every few years, absorbing latest technical tools and high-stakes hustle of modern workspaces.

However, systemic change requires Incentivizing Quality. Teaching must be transformed into a financially lucrative and socially prestigious career path, one that actively competes for the attention of top-tier engineers and managers.

Finally, classroom experience itself must evolve. Faculty training should prioritize Facilitation over Rote Learning, shifting instructor’s role from a sage on stage who merely finishes a syllabus to a guide on the side who masters art of sparking deep, critical discussion.

The Mindset Shift

Pouring capital into high-end hardware and sprawling glass campuses is a superficial remedy for a deep-seated educational crisis. Without a foundation of exceptional teaching, these assets are little more than expensive set dressing. It is a classic case of White Elephant Syndrome, institutions invest crores in advanced machinery primarily to dazzle regulators and parents. Yet, since faculty often lacks practical expertise to integrate this tech into a real-world context, equipment ends up mothballed under plastic sheets, serving as a monument to wasted potential.

The gap between intent and impact is most visible in curriculum. Updating a syllabus is not merely a clerical exercise, it is about bringing those subjects to life and should be an art form. In the hands of an uninspired educator, even most modern curriculum remains new wine in a very old bottle. This stems from a fundamental misallocation of resources. Indian institutions consistently over-index on physical infrastructure because it is visible, marketable, and easy to quantify. Meanwhile, soft infrastructure, rigorous teacher training and competitive salaries, is neglected simply because its value is harder to capture in a brochure.

Lost Navigator
PC: Gemini

Finally Syllabus is a map, ship the infrastructure, but the teacher is the navigator. If the navigator is lost, however accurate the map, ship will never reach the port of employment, no matter how shiny the vessel.