Cabinet clears Rs.60,000 Cr scheme to upgrade ITIs and set up national CoE for skilling

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a Rs. 60,000 crore National Scheme for Industrial Training Institute (ITI) Upgradation and Setting up of Five National Centres of Excellence (NCOE) for Skilling.

India currently has over 14,600 ITIs with more than 14.4 lakh enrolled students, but only incremental support has been provided so far for infrastructure and modernisation. This new centrally backed scheme is being seen as a transformational step toward making vocational education more aspirational, accessible, and effective.

The scheme will be implemented as a Centrally Sponsored Scheme and aims to modernise 1,000 government-run ITIs across the country and set up five cutting-edge Centres of Excellence at key National Skill Training Institutes (NSTIs). The move is expected to benefit 20 lakh youth over five years.

The scheme will be co-financed by the Central Government (Rs. 30,000 crore), State Governments (Rs. 20,000 crore), and Industry (Rs. 10,000 crore). Additionally, half of the central share will be supported by the Asian Development Bank (ADB) and the World Bank, highlighting strong global backing for India's skill development mission.

A unique feature of this scheme is the introduction of an industry-led Special Purpose Vehicle (SPV) model to oversee ITI upgradation. This approach will ensure better industry participation, course alignment, and outcome-driven implementation. For the first time, ITIs will be positioned as government-owned but industry-managed aspirational institutes, improving both relevance and employability.

Key Features of the Scheme

• 1,000 Government ITIs will be upgraded in a hub-and-spoke model, ensuring wide outreach and industry linkages.
  
  
• Five National Skill Training Institutes (NSTIs), in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana, will see capacity upgrades.
  
  
• Each of these NSTIs will host a National Centre of Excellence (NCOE) focused on advanced skilling aligned to high-growth sectors like electronics, automotive, and renewable energy.
  
  
• Around 50,000 trainers will receive pre-service and in-service training to improve the quality of instruction.
  
  
• A flexible funding model will allow ITIs to receive funds based on their specific needs, whether for infrastructure, advanced equipment, or new-age trades.

Addressing Long-standing Challenges

Despite their wide reach, many ITIs in India have faced challenges in keeping pace with modern industry demands. Lack of adequate infrastructure, outdated courses, and low aspirational value have affected their impact. This new scheme is designed to overcome these barriers with sustained investment, deep industry collaboration, and modernised curricula.

The government envisions the upgraded ITIs and Centres of Excellence as key enablers for "Viksit Bharat", the mission to make India a developed nation by 2047. By creating a pipeline of skilled, job-ready workers, the scheme is expected to address skill shortages across sectors and support India’s growing manufacturing and innovation ecosystems.