Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM‑SETU) : Component I
Ministry: Ministry Of Skill Development And Entrepreneurship
The scheme aims to upgrade ITIs into industry-led institutions. Through this scheme, infrastructure, training, and employment-oriented benefits are provided to trainees.
About This Scheme
Benefits
> Financial Outlay and Financing Structure:
₹60000.0 Cr
The total outlay of the scheme is ₹60,000/- crore over five years. This cost is shared among
the Central Government, State Governments, and Industry, as shown below:
ParticularsTotal (₹ Crore)Central (₹ Crore)State (₹ Crore)Industry (₹ Crore)Total Scheme Outlay (5 years)60,000/-30,000/-20,000/-10,000/-This corresponds to a funding pattern of approximately 50% Central: 33% State: 17% Industry. Each Hub-and-Spoke cluster will maintain this cost-sharing ratio in its funding plan as indicated in the Strategic Investment Plan (SIP).
> Indicative Investment per ITI and Cluster:
₹81.0 Cr
Under the Scheme, support will be provided for the upgradation of Hub ITIs with an outlay not exceeding ₹81 crore (over five years) and for Spoke ITIs with an outlay not exceeding ₹40 crore.
In cases where the overall cost of upgradation exceeds the prescribed outlay, the contribution of the Central Government shall be capped at 50% of the above ceiling amounts and limited strictly to capital expenditure (exceptions apply for North-Eastern and Hilly States and Union Territories without legislature).
> Indicative Cost for Cluster:
₹241.0 Cr
One Hub + Four Spokes (cluster total): ₹241 crore per cluster
₹48.2 Cr · annual
Annual cost for one cluster (5-year average): ~₹48.2 crore per year
> Component-wise Outlay (1000 ITIs):
₹20220.0 Cr
Upgradation of 200 Hub ITIs: ₹20,220 crore
₹36680.0 Cr
Upgradation of 800 Spoke ITIs: ₹36,680 crore
₹56900.0 Cr
Subtotal – ITI Upgradation (Component I): ₹56,900 crore
> Central Support for Scheme Management:
₹1600.0 Cr
₹1,600 crore is earmarked for governance, project management, and capacity-building activities over five years, including:
₹200.0 Cr
Capacity building of central and state agencies: ₹200 crore
₹100.0 Cr
Office expenditure: ₹100 crore
₹600.0 Cr
IT and digital infrastructure (including LOMS): ₹600 crore
₹100.0 Cr
Technical assistance: ₹100 crore
₹100.0 Cr
Media, awareness, and advocacy: ₹100 crore
₹100.0 Cr
Evaluations, studies, and research: ₹100 crore
₹400.0 Cr
Project Management Unit (PMU) support: ₹400 crore
> Fund Flow Mechanism:
Each approved cluster SPV will operate an escrow bank account to collect funds from all sources. All contributions – Central, State, and Industry – are deposited into this escrow account, and funds become available only after all three parties have contributed their respective shares.
> Fund Disbursement:
Initial Advance (Year 1):
An advance of up to 10% of the total project outlay shall be released upon approval of the Strategic Investment Plan (SIP).
Annual Instalments (Years 2–5):
The remaining funds are disbursed in annual instalments in two tranches of 50% each, subject to:
Utilisation of at least 75% of previous funds
Approval of Annual Operational Plan (AOP)
Achievement of at least 80% of Key Performance Indicators (KPIs)
> Validity:** The scheme is implemented over a period of five years.
Required Documents
- ✦Expression of Interest (EOI) Document
- ✦Request for Proposal (RFP) Response
- ✦Strategic Investment Plan (SIP) as per the prescribed template
- ✦Company Registration/Incorporation Documents (for industry partner)
- ✦Financial Statements showing turnover (as per State criteria)
- ✦Number of Employees Documentation
- ✦Debarment Declaration Certificate (declaring not debarred by any government agency)
- ✦Commitment Letters from State Government for staffing, scheme funding, and regulatory reforms
- ✦Letters of Collaboration from partner industries (if applicable)
- ✦Baseline Characteristics Document of Hub and Spoke ITIs (Template 1)
- ✦Budget Allocation Documents of Last Three Financial Years (Template 2)
- ✦Five-Year Investment Plan Budget (Template 3)
- ✦Performance Indicators Documentation (Template 4)
- ✦Implementation Gantt Chart (Template 5)
- ✦MoUs with Industries for Employment, Apprenticeships, and Funding (if applicable)
- ✦HR Plan Document including Managerial Capacity Details
- ✦Credentials of Proposed SPV CEO and Management
- ✦Shareholders' Agreement (SHA)
- ✦License Agreement (LA)
- ✦Performance Security (Bank Guarantee from Scheduled Bank)
- ✦Annual Operational Plan (AOP)
- ✦Asset Register
- ✦Utilization Certificates Certified by Chartered Accountant
- ✦> Note: [Click Here For Template](https://www.msde.gov.in/static/uploads/2026/04/407d256a1244bfbcce7cf324f216fc1f.pdf))
✦ Required ◦ Optional
How to Apply
Quick Info
- Level
- Central Government
- Max benefit
- ₹60000.0 Cr
