Cabinet approves ₹60,000-cr scheme to upgrade ITIs, set up 5 National Centres of Excellence

The Union Cabinet on Wednesday approved the National Scheme for Industrial Training Institute (ITI) Upgradation and the setting up of five National Centres of Excellence for Skilling, with a total outlay of ₹60,000 crore.

The centrally sponsored scheme, announced under the Union Budgets of 2024-25 and 2025-26, will involve a financial contribution of ₹30,000 crore from the Centre, ₹20,000 crore from states, and ₹10,000 crore from industry partners. The Asian Development Bank and the World Bank will co-finance 50% of the Centre’s share equally.

The scheme aims to upgrade 1,000 government ITIs in a hub-and-spoke model, introduce industry-aligned courses, and enhance the capacity of five National Skill Training Institutes (NSTIs), which will host the proposed National Centres of Excellence.

“The scheme aims to position existing ITIs as government-owned, industry-managed aspirational institutes of skills, in collaboration with State Governments and industry,” an official statement said.

It targets skilling 20 lakh youth over five years in line with industry demands, boosting employment readiness and bridging the skilled manpower gap in high-growth sectors such as electronics, automotive, and renewable energy.

Highlighting the need for enhanced funding, the government said that previous financial assistance schemes fell short in addressing infrastructure and capacity expansion needs. The new scheme provides a need-based investment framework, allowing flexible fund allocation tailored to each institution’s requirements.

For the first time, an industry-led Special Purpose Vehicle (SPV) model will be adopted to ensure an outcome-driven implementation strategy, making it distinct from previous efforts to improve the ITI ecosystem.

The NSTIs in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana will undergo infrastructure upgrades to enhance Training of Trainers (ToT) facilities. The scheme will support pre-service and in-service training for 50,000 trainers.

Since 2014, India’s ITI network has grown by nearly 47%, reaching over 14,600 institutes with 14.4 lakh enrolments. However, the vocational training ecosystem has faced challenges related to outdated infrastructure and limited aspirational value, issues the new scheme seeks to comprehensively address.

"While in the past there have been schemes to support the upgradation of ITIs, it is perhaps, the best time to scale incremental efforts of the last decade through a nationally scalable program for ITI re-imagination with course content and design aligned with industry needs to create a pool of skilled workforce as one of the key enablers to realize the goal of Viksit Bharat," it added.