PM-SETU Approves ₹735.70 Crore for ITI Clusters in Rajasthan, Telangana and Uttar Pradesh

The National Steering Committee of the PM-SETU scheme approved Strategic Investment Plans worth ₹735.70 crore for three Industrial Training Institute clusters in September 2026. The approvals cover the Bhiwadi cluster in Rajasthan, the Medchal cluster in Telangana and the Meerut cluster in Uttar Pradesh, and they raise the total sanctioned investment under the scheme to ₹2,171 crore across nine clusters. The same meeting also saw Rajasthan become the first state to sign a Shareholders’ Agreement, turning a funding plan into the start of real work on the ground.

What Is the PM-SETU Scheme?

The Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM-SETU) is a Centrally Sponsored Scheme that aims to rebuild India’s vocational training system from the ground up. It grew out of the Union Budget 2024-25 announcement on upgrading Industrial Training Institutes, and the Union Cabinet approved it in May 2025. The Prime Minister launched the scheme on 4 October 2025.

The scheme has a total outlay of ₹60,000 crore over five years. The money is shared three ways: ₹30,000 crore from the Centre, ₹20,000 crore from the states and ₹10,000 crore from industry. This works out to roughly a 50:33:17 funding split. The Asian Development Bank and the World Bank are co-financing 50 per cent of the Central share equally, as a result-based loan.

PM-SETU rests on two components:

The core idea is simple. Instead of the government running every ITI by itself, the scheme hands over day-to-day management to industry partners while the government retains ownership and co-funding. The stated goal is to create an industry-led, outcome-oriented system where trainees learn skills that factories and firms actually need.

The Ministry of Skill Development and Entrepreneurship (MSDE), established in 2014, runs the scheme. Its key arms are the Directorate General of Training (DGT), the National Council for Vocational Education and Training (NCVET), the National Skill Development Corporation (NSDC) and the National Skill Development Fund (NSDF). MSDE is headquartered in New Delhi.

What Are Industrial Training Institutes?

Industrial Training Institutes (ITIs) are the country’s main vocational training institutions for school pass-outs who want job-ready technical skills. They were set up with the launch of the Craftsmen Training Scheme (CTS) in 1950. The day-to-day administration of ITIs was handed to state governments in 1956, and financial control followed from 1 April 1969.

The DGT runs the CTS through a nationwide network of ITIs. Training is offered in courses aligned with the National Skills Qualification Framework (NSQF) and approved by NCVET. Courses run for durations ranging from six months to two years. The DGT has developed 170 NSQF-compliant courses, including 32 new-age and future skills trades such as Artificial Intelligence Programming Assistant, Semiconductor Technician, Drone Technician, Green Hydrogen Production Technician and Mechanic Electric Vehicle.

The scale of the ITI network makes it a major part of India’s skilling machinery. The number of ITIs has grown from 9,642 in 2014 to 13,856 in 2026, with enrolment rising from about 9.51 lakh in 2014-15 to 14.70 lakh in the 2025-26 session. Of these, around 3,328 are government ITIs and the rest are private.

The system has long faced criticism for outdated tools, weak industry links and low placement outcomes. Many ITIs still teach with machines and syllabi that date back decades. PM-SETU is the government’s answer to that gap, and it focuses only on government ITIs to raise the quality of the public vocational system.

The Fifth National Steering Committee Meeting: Three New Approvals

The National Steering Committee (NSC) is the apex body of PM-SETU. It is chaired by the Secretary of MSDE and provides the overall vision, policy direction and monitoring for the scheme. Its fifth meeting was held in September 2026 under the chairpersonship of Debashree Mukherjee, Secretary, MSDE. The meeting was attended by senior ministry and state government officials, representatives of multilateral development banks and industry partners, along with Dilip Kumar, Director General, DGT, and G. Madhumita Das, Additional Secretary and Financial Adviser, MSDE.

At this meeting, the NSC approved three Strategic Investment Plans with a combined outlay of ₹735.70 crore. The approved plans are:

Each cluster covers one hub ITI and four spoke ITIs, so the three approvals together touch 15 government ITIs. The approved plans allow for infrastructure modernisation, upgradation of existing trades, introduction of new long-term and short-term courses, and stronger operational capabilities.

The Medchal plan had earlier been deferred at the fourth NSC meeting because of pending clarifications on operational and financial aspects. It was cleared this time after those clarifications.

What Is a Strategic Investment Plan?

A Strategic Investment Plan (SIP) is the five-year financial and operational blueprint for a single ITI cluster. The industry partner prepares it, and it lays out year-wise capital and operational expenditure, including civil works, machinery, trainer hiring, curriculum development and student support. The SIP sets the cluster’s overall budget envelope.

Every SIP passes through two stages before funding. First, the respective State Steering Committee (SSC), headed by the state Chief Secretary, evaluates and recommends it. Then it goes to the NSC for final approval. This double-filter design keeps the states involved while letting the Centre supervise the national rollout.

Rajasthan Becomes First State to Sign a Shareholders’ Agreement

The approval of money and the start of actual work are two different things. The fifth NSC meeting marked that second step for Rajasthan. A Shareholders’ Agreement (SHA) was signed among H.G. Infra Engineering Limited, the Government of Rajasthan and the MSDE.

With this, Rajasthan became the first state in the country to execute an SHA under PM-SETU. The agreement formally begins implementation activities for the Bhiwadi ITI cluster. It was signed in the presence of Sandeep Verma, Additional Chief Secretary, Department of Skill, Employment and Entrepreneurship, Government of Rajasthan.

The Bhiwadi cluster is built around Government ITI Bhiwadi as the hub, with Government ITIs at Alwar, Neemrana, Tijara and Kishangarh Bas as the spoke institutions. Bhiwadi and Neemrana sit in Rajasthan’s industrial belt near the Delhi-Mumbai Industrial Corridor and the Khushkhera-Bhiwadi-Neemrana investment region, an area with a heavy concentration of automobile, auto-component and manufacturing units. That industrial base is why an infrastructure and engineering firm like H.G. Infra Engineering fits as the anchor partner for this cluster, and why the trades taught here can be matched directly to local factory demand.

The distinction between these two firsts matters. Andhra Pradesh was the first state to operationalise an industry partnership, after its Visakhapatnam cluster SIP was approved in May 2026. Rajasthan is the first to sign the SHA, which is the formal company-level agreement needed to start spending and building. Both are firsts, but in different stages of the process.

How the Hub-and-Spoke Model and SPVs Work

Under PM-SETU, ITIs are grouped into clusters. Each cluster has one Hub ITI supported by around four Spoke ITIs, and this is called the Hub-and-Spoke model. A hub ITI can get support of up to ₹81 crore over five years, and each spoke ITI up to ₹40 crore. A typical cluster of one hub and four spokes is estimated at around ₹241 crore, which matches the Bhiwadi outlay closely.

The hub is meant to act as the advanced centre with high-end labs, modern machinery and new courses. The spoke ITIs feed into it and share its upgraded training resources. This lets the government spread investment across many institutes instead of concentrating it in a few cities.

Each cluster is run by a Special Purpose Vehicle (SPV), a joint company formed for the purpose. The industry partner holds 51 per cent ownership and retains management control, while the government holds 49 per cent. Because the private partner carries the lead role, it can also draw government co-funding of up to 83 per cent of the project cost.

The SPV’s job goes well beyond building. It redesigns curricula, decides training delivery models, upgrades infrastructure and arranges industry exposure. It also prepares the SIP and an Annual Operational Plan (AOP) for each year. If the SPV wants to reallocate money within an already approved annual envelope, its own Board can approve it and inform the SSC and NSC within 15 days. But any plan to exceed the annual limits in the SIP needs fresh clearance from the SSC and NSC.

Analogy · Hub and Spoke, Explained Simply Expand analogy

Think of a cluster as a well-equipped district hospital surrounded by smaller primary health centres. The big hub has the specialists, machines and advanced treatment, while the spokes handle routine care and send complicated cases upward. In the same way, the Hub ITI carries the advanced labs and new-age trades, and the Spoke ITIs share that upgraded capacity.

The partner companies are called Anchor Industry Partners (AIPs), and they are selected through a Request for Proposal (RFP) process run by the states. States set their own minimum eligibility rules, such as turnover and employee strength, to ensure only credible firms apply. The selection uses a Quality and Cost Based Selection (QCBS) method, which weighs technical strength, cost efficiency and the size of private investment.

Cumulative Investment Under PM-SETU So Far

The three September 2026 approvals took the total sanctioned investment under PM-SETU to ₹2,171 crore across nine ITI clusters. Before this meeting, six Strategic Investment Plans had already been cleared.

The first SIP was approved in May 2026 for the Visakhapatnam ITI Cluster in Andhra Pradesh, submitted by ArcelorMittal Nippon Steel India (AM/NS India) with New Age Makers Institute of Technology (NAMTECH) as its academic partner. This made Andhra Pradesh the first state to onboard an Anchor Industry Partner under the scheme.

The fourth NSC meeting in July 2026 cleared five more SIPs together worth ₹1,237.58 crore across Odisha, Gujarat and Telangana:

Read together, the nine approved clusters now span Andhra Pradesh, Rajasthan, Telangana, Uttar Pradesh, Odisha and Gujarat, with Telangana alone accounting for four clusters. The anchor partners come from very different sectors, including steel, infrastructure, medical skills, pharma and defence technology. That spread is deliberate. PM-SETU wants each cluster shaped around the industries that already exist in its region, so that training leads to local jobs.

The states driving the process are also expanding. Around 32 states and union territories have set up their State Steering Committees, and many have floated Requests for Proposals to invite industry interest. States such as Karnataka, Maharashtra, Chhattisgarh, Madhya Pradesh and Uttarakhand are at various stages of identifying clusters. The scheme is being implemented in a phased manner over five years, with the first phase covering about 20 to 25 clusters (100 to 125 ITIs) to test the model before the full rollout.

The Way Forward

PM-SETU matters because India adds millions of young workers to its labour force every year, and the country’s vocational system has to convert that demographic dividend into employable skills. The scheme’s industry-led design is its biggest strength and also its main test. If anchor companies deliver the promised infrastructure and placements, government ITIs could finally shed their old reputation. If partners treat the clusters as a source of cheap labour or CSR optics, the same model could stall.

The early signals are mixed but moving in the right direction. Approvals have covered nine of the targeted 200 hub clusters, and most states are still in the proposal or tender stage. The real measure will be how quickly the Bhiwadi cluster moves from a signed agreement to upgraded workshops and new courses. With the World Bank and Asian Development Bank co-financing part of the Central share, the scheme also carries external accountability, as loan releases are tied to verified results such as enrolment, completion and placement outcomes.

The next NSC meetings are expected to clear more state plans, including clusters from Karnataka, Maharashtra and Chhattisgarh. For India’s skilling story, the question is no longer whether PM-SETU will be funded, but whether it can be delivered on time and at scale.

Key Takeaways

• The fifth National Steering Committee meeting under PM-SETU approved Strategic Investment Plans worth ₹735.70 crore for ITI clusters in Rajasthan, Telangana and Uttar Pradesh.
• The approvals raised the cumulative sanctioned investment under PM-SETU to ₹2,171 crore across nine ITI clusters.
• The three new clusters are Bhiwadi in Rajasthan (₹241 crore), Medchal in Telangana (₹254.30 crore) and Meerut in Uttar Pradesh (₹240.40 crore), anchored by H.G. Infra Engineering, ZEN Technologies and the NSDC respectively.
• Rajasthan became the first state to sign a Shareholders’ Agreement under PM-SETU, formally starting implementation of the Bhiwadi ITI cluster.
• PM-SETU is a Centrally Sponsored Scheme with a total outlay of ₹60,000 crore, launched on 4 October 2025, to upgrade 1,000 government ITIs through the Hub-and-Spoke model.
• Each cluster is managed by a Special Purpose Vehicle (SPV) in which industry holds 51 per cent and the government 49 per cent, with the hub ITI getting up to ₹81 crore and spoke ITIs up to ₹40 crore over five years.
• The Asian Development Bank and the World Bank are co-financing 50 per cent of the Central share as a result-based loan.