SDG 4: Quality Education | SDG 5: Gender Equality | SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure
Ministry of Skill Development and Entrepreneurship (MSDE) | Digital Communications Commission (DCC)
The World Bank has approved an $830 million loan to support India’s ambitious PM-SETU Program, a strategic initiative designed to revamp the nation’s network of Industrial Training Institutes (ITIs). Announced on February 2, 2026, the Supporting Pradhan Mantri Skilling and Employability Transformation Through Upgraded ITIs (PM-SETU) Program aims to address the persistent skills mismatch that currently constrains India’s productivity and firm growth. Prepared jointly with the Asian Development Bank, the program will mobilize at least $680 million in private capital, embedding industry-driven training across the system to elevate graduate job placement rates, which currently stand at less than 50%.
Institutional Overhaul and Gender Parity The program focuses on transforming ITIs into resource-efficient centers of excellence through a “hub-and-spoke” model.
Economic Value: The initiative supports India’s $4 billion investment plan to upgrade ITIs, aiming to produce more than a million better-skilled workers annually to meet the demands of a $5 trillion economy.
Specialized Excellence: ITIs will transition to a balanced mix of training, consultancy, and production functions, allowing them to generate independent revenue to sustain and expand facilities.
Inclusive Growth: A primary goal is to break gender barriers in traditionally male-dominated trades like welding and mechanics, with a mandate to ensure that at least 25 percent of ITI students are women within the next five years.
What is the “hub-and-spoke” model for ITIs proposed under the PM-SETU Program? The hub-and-spoke model is a resource-efficient organizational structure where a central ‘hub’—an ITI designated as a Center of Excellence—serves as a specialized resource and training anchor for surrounding ‘spoke’ extension centers. This model allows for the centralization of expensive high-tech equipment and highly qualified trainers at the hub, while spokes provide wider geographic access to standardized curricula, ensuring that high-quality, industry-aligned training reaches rural and underserved regions without duplicating infrastructure costs.
Policy Relevance
The PM-SETU Program marks a transition from government-led vocational training to private sector-embedded human capital development.
Market-Aligned Skilling: By mobilizing $680 million in private capital, the program institutionalizes “industry-pull,” ensuring that curricula are dynamically updated to reflect the real-time technical needs of firms rather than outdated academic standards.
Viksit Bharat Aspirations: Upgrading the skills of the 12 million people entering the labor market annually is a prerequisite for achieving India’s goal of becoming a high-income country by 2047.
Fiscal Sustainability: The shift toward ITIs generating their own revenue through consultancy and production functions reduces long-term dependence on direct central grants, fostering an entrepreneurial mindset within educational institutions.
Bridging the Gender Pay Gap: By targeting a 25% female enrollment in high-demand technical trades, the policy directly addresses the “missing middle” of women in the formal industrial workforce, potentially boosting household incomes and national GDP.
Relevant Question for Policy Stakeholders: How can the Ministry of Skill Development and Entrepreneurship ensure that the $680 million in private capital is effectively distributed to incentivize ‘Hub’ ITIs to prioritize training in emerging sectors like Green Hydrogen and Semiconductor manufacturing?
Follow the full news here: World Bank Supports India’s Ambitious Skills Program to Better Prepare Youth for the Job Market