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PM-SETU Program: Potential Fault Lines and Fixes

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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.

Read my earlier article on details of the scheme Bridging Skills for 2047: The PM-SETU here. Though it covers potential pitfalls and mitigation risks, this article addresses the same is in greater detail.

Potential Risks and Mitigation

I have tried to classify the potential risks into various categories and highlight the issues under each one of them.

Pitfalls in Delivery: The Anchor Industry Partner (AIP) Model

Commitment and Focus: Industries’ primary focus is business and profit, not skill development. They may view managing an ITI cluster as a Corporate Social Responsibility (CSR) compliance or a low-priority function, leading to inconsistent engagement and neglect of the training center.

Achor Industry’s Priorities

Proprietary Knowledge & Secrecy Companies are often reluctant to share proprietary knowledge, cutting-edge technology, or trade secrets with the ITI, fearing it could benefit competitors or lead to leakage of confidential processes. This limits the “customized syllabus” to non-core, outdated, or basic skills.

Geographic Mismatch Finding a genuinely relevant and committed AIP for ITIs located in remote or underdeveloped rural areas is extremely difficult due to the low density of established industries, defeating the purpose of modernizing every cluster.

Bureaucratic Conflict The “Government-owned, Industry-managed” model creates a high potential for friction. Industry-led SPVs (Special Purpose Vehicles) may clash with existing government bureaucracy, processes, and the typically slow decision-making cycles of the government.

Pitfalls in Assessment and Standards

The shift to outcome-based, customized training creates new risks for standardization and quality control:

Non Standard Assessment and Misplaced Metrics

Assessment Subjectivity: When the assessment is heavily influenced by the AIP or local industry, it risks becoming non-standardized across different ITI clusters. An assessment standard set by a small regional industry might not meet the quality threshold of a national or international company.

“Certificate of Attendance” Risk: There is a risk that the assessment focuses purely on fulfilling a placement metric rather than genuine competency. If the AIP needs a certain number of workers, the assessment might be diluted to certify candidates quickly, leading to poor quality graduates.

Trainer Capacity Gap: The biggest long-standing challenge in ITIs is the lack of qualified trainers who are competent in the latest Industry 4.0 technologies (AI, Robotics, EV maintenance). PM-SETU requires a massive, rapid “Training-of-Trainers” (ToT) program, and failure to execute this will render the new customized syllabus and machinery useless.

Pitfalls in Qualification Portability

Achieving true national and global portability of a certificate based on a customized syllabus is complex:

Qualification Portability

Lack of Uniformity in Customization: A syllabus customized for one AIP’s plant in Karnataka may teach different skills or standards than one customized for a different AIP’s plant in Haryana. If these customized certificates do not map perfectly to the National Skill Qualification Framework (NSQF), their value outside the local industrial cluster diminishes.

Industry Recognition (Internal vs. External): While the certificate will be recognized by the Anchor Industry Partner that helped design it, securing external recognition from the wider, unassociated industry (especially in the informal sector, where most of India’s workforce is employed) remains a challenge.

Social Stigma: Despite significant investment, vocational training in India often suffers from low social prestige compared to formal higher education. Unless PM-SETU demonstrably guarantees high-paying and aspirational jobs, the scheme may still face low capacity utilization (vacant seats) and a lack of highly motivated students, as seen in past ITI reform efforts.

Mitigation for Delivery & AIP Commitment (Industry Engagement)

To ensure the Anchor Industry Partner (AIP) delivers on its mandate and doesn’t merely provide token involvement, the scheme uses financial and governance levers:

Financial Skin in the Game: The scheme employs a blended financing model where the industry is required to contribute an estimated ₹10,000 crore (out of the total ₹60,000 crore). This Industry Share ensures a financial commitment and vested interest in the success and long-term viability of the ITI cluster.

Performance-Linked Funding: Funds are released to the state and the Special Purpose Vehicle (SPV) based on Key Performance Indicators (KPIs). These KPIs are tied to outcome-based metrics like placement rates, capacity utilization, and trainer competency upgrades, ensuring that the focus remains on results rather than just infrastructure spending.

Strong SPV Governance: The Special Purpose Vehicle (SPV) managing the ITI cluster is structured to give the AIP significant autonomy (potentially a 51% share in industry-led SPVs), but this autonomy is balanced by a tripartite agreement (Shareholders’ Agreement and License Agreement) that clearly defines roles and mandates the AIP’s obligations for curriculum, infrastructure, and outcomes.

Encouraging Consortia: The scheme encourages the formation of a consortia of multiple industries rather than relying on a single AIP, especially in smaller or remote clusters. This diffuses the risk of a single company losing interest and broadens the relevance of the skills imparted.

Mitigation for Assessment & Standards

To combat subjectivity and the risk of poor trainer capacity, PM-SETU is leveraging institutional and global partnerships:

Global Benchmarking and Co-Financing: The project is co-financed by multilateral agencies like the World Bank and the Asian Development Bank (ADB). This involvement brings in international expertise and global best practices for design, delivery, and rigorous third-party evaluation, ensuring the standards are not just local but globally relevant.

Focus on Trainers (ToT): A major component is the capacity augmentation of 5 National Skill Training Institutes (NSTIs) into Global Centres of Excellence (NCOEs). These NCOEs are tasked with the crucial mission of running an intensive Training-of-Trainers (ToT) program to skill and re-skill up to 50,000 trainers in new-age trades (like AI, Robotics, etc.), directly tackling the quality gap.

Outcome-Based Certification: The scheme emphasizes strengthening the National Council for Vocational Education and Training (NCVET) framework to ensure that customized courses are properly aligned and mapped to the National Skill Qualification Framework (NSQF) levels. Assessment is therefore focused on demonstrating a defined level of competency needed for employment.

Mitigation for Qualification Portability & Stigma

Integration with NSQF and Pathways: By ensuring that customized courses are mapped to the NSQF, the qualification gains a defined, nationally recognized value, making it portable across states and industries in India.

Flexible Educational Pathways: The scheme creates new pathways for students, allowing them to pursue long-term diplomas and executive programs after their ITI certificate. This integration with the broader education system helps reduce the social stigma associated with vocational training by offering options for higher education and career progression, rather than a single terminal qualification.

Hub-and-Spoke Model for Equity: The Hub-and-Spoke model (200 Hub ITIs connected to 800 Spoke ITIs) is designed to ensure that the cutting-edge infrastructure and training standards of the “Hub” are disseminated to ITIs even in remote or underserved regions, promoting equitable access and ensuring a uniform quality standard across the country.

These mitigation strategies aim to transform the ITI ecosystem from a state-run, rigid system into a market-responsive, accountable, and high-quality vocational training network.

Unlocking Skills in Non-STEM Education

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Upon invitation by Secretary, Shri Narayanan and the leadership team of Saraswathi Narayanan College of Arts and Science, Madurai, to deliver an interactive session on the Skilling Ecosystem and its relevance in Arts, Humanities, and Social Sciences, wanted to share the learnings for wider reach. Although initially planned as a talk with Q&A, the format was shifted to a fully interactive session from the start, which proved to be more effective. Using data at national, state, and district levels, the session highlighted the critical gap in skills among graduates across all streams, making a strong impact on the audience.

The perception, no different in this audience too (major percentage from Non-STEM branches), that non-STEM programs is “all about knowledge” and not “skills” is widespread—but it’s also quite misleading for following reasons

In STEM fields like science and engineering, hands-on activities are common, with students spending time in labs, coding, or working on projects. In contrast, non-STEM subjects are traditionally focused on theory, critical thinking, and abstract reasoning, and they often lack clear, tangible “hands-on” components.

In India, non-STEM courses often use essays, exams, and theoretical discussions as their main forms of assessment. While these methods test a student’s ability to recall and interpret information, they can hide the practical skills being developed.

A skill is the ability to do something well, which is gained through practice and experience. While skills can be physical or mental, those like critical thinking, communication, empathy, and cultural literacy are difficult to measure. Because of this, they are often undervalued compared to more easily quantifiable skills like programming or data analysis.

Employers tend to look for hard skills like Excel and Python, which are simple to teach and test. This creates a misconception that non-STEM graduates aren’t as “job-ready,” even though these graduates often have strong soft skills essential for leadership, collaboration, and innovation.

Changing the Mindset
Non-STEM fields develop crucial transferable skills such as creativity, communication, critical thinking, research, and empathy.
These skills are often implicitly embedded in the coursework rather than explicitly taught. For example, a history student’s work on analyzing sources and constructing arguments teaches them research and communication skills without those being the explicit focus of the assignment.
Modern non-STEM education is evolving to make these skills more explicit through methods like project-based learning, internships, and the integration of digital tools like GIS and data visualization.

Making these Skills Visible
To better showcase the value of non-STEM education, there are four key strategies:
Curriculum Design: Clearly state the skills students will gain in all course materials and assessments.
Skill Mapping: Create frameworks that help students and faculty identify and explain the skills being developed
Industry Collaboration: Work with employers to demonstrate the unique value non-STEM graduates bring to the workforce.
Aspirational: Highlight success stories of non-STEM graduates who have become leaders, innovators, and entrepreneurs.

Skills in Various non-STEM Disciplines
Literature focuses on building skills in critical thinking, empathy, communication, and cultural literacy.
History hones abilities in research, analytical reasoning, and argumentation.
Psychology emphasizes observation, data interpretation, and interpersonal skills.
Sociology develops systems thinking, qualitative analysis, and ethical reasoning.
Philosophy strengthens logic, ethical decision-making, and abstract reasoning.
Fine Arts cultivates creativity, design thinking, and visual communication.
Media Studies teaches storytelling, media literacy, and audience analysis.

Skill development is vital in all academic fields, both STEM and non-STEM, because it gives students the practical ability to use their knowledge in real-world situations. While STEM focuses on technical skills, non-STEM fields build equally important competencies like critical thinking, communication, and creativity. These skills are essential for leadership and innovation and are highly valued by employers. Ultimately, incorporating skill development into all education ensures graduates are not just knowledgeable but also capable and adaptable in the workforce.