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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 This limits the “customized syllabus” to non-core, outdated, or basic skills.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.

Spotlight Trap

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In the bustling tech hub of Bengaluru, three colleagues—Vinay, Meena, and Karthik—worked at a mid-sized startup called InnoSpark. The company was known for its innovation in AI-driven education platforms, and the trio were part of the product development team.

Vinay was charming and articulate, often the face of presentations. Meena was meticulous, a quiet powerhouse of ideas and execution. Karthik, the coder, was the backbone—his algorithms made the platform truly intelligent.

But there was a problem. Vinay had a habit. Whenever a project succeeded, he would subtly position himself as the key contributor. In meetings, he’d say things like, “I suggested that feature tweak,” or “I guided the team through that sprint,” even if the idea came from Meena or the code from Karthik. His charisma made it easy for others to believe him.

At first, Meena and Karthik let it slide. They thought, It’s just office politics. Let the work speak for itself. But over time, Vinay’s name started appearing alone in internal newsletters, client presentations, and even in the CEO’s praise.

Then came the big opportunity: a government-backed SkillTech initiative was scouting for partners. InnoSpark was shortlisted, and Vinay was chosen to lead the pitch.

But this time, Meena and Karthik decided to act.

They compiled a detailed report of their contributions, backed by version histories, emails, and design documents. Quietly, they shared it with the CEO, not to sabotage Vinay, but to ensure transparency.

The day of the pitch arrived. Vinay, confident as ever, began his presentation. But midway, a panelist asked a technical question—one that only Karthik could answer. Vinay fumbled. Another asked about user experience design—Meena’s domain. Again, Vinay stumbled.

The CEO, watching silently, stepped in. “Let’s bring in the team behind this,” he said. Meena and Karthik joined the stage, and the tone of the meeting shifted. The panel was impressed—not just by the product, but by the real minds behind it.

Vinay was later reassigned to a client-facing role. Meena became the new product lead, and Karthik was promoted to head of engineering.

Months later, InnoSpark was acquired by a global edtech giant. The new leadership reviewed past projects and team dynamics. Surprisingly, Vinay was offered a senior leadership role in the parent company—not for his technical skills, but for his ability to sell ideas and build relationships.

Meanwhile, Meena and Karthik, though brilliant, struggled to navigate the new corporate culture. Their work was solid, but they lacked Vinay’s flair for visibility and influence.

One evening, Meena received a message from Vinay:

“You were right to call me out. I deserved it. But remember—visibility matters as much as ability. Let’s not repeat each other’s mistakes.”

Meena stared at the screen, thoughtful. Maybe the real danger wasn’t just stealing credit—but failing to claim it when it was truly yours.

Final Moral:
Stealing credit is unethical and unsustainable and may bring short-term glory but erodes trust and exposes incompetence when challenge arise. On the other hand, staying invisible despite doing great work can be equally dangerous. Integrity must be paired with strategic visibility.

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.