ITI Upgradation: Betting on Future Skills for Viksit Bharat
Ritesh Kumar
India’s industrial future is being shaped by rapidly evolving sectors such as electronics, green energy, automotive, and logistics, each generating strong demand for skilled, adaptable workers. The electronics manufacturing sector, fuelled by the Production Linked Incentive (PLI) scheme and semiconductor investments, is expected to create over 10 lakh jobs by 2030. The green economy—driven by solar power, electric vehicles, and battery storage—is projected to generate 30 to 40 lakh jobs by 2047, with emerging roles such as EV technicians, solar equipment operators, and energy efficiency auditors. Similarly, the automotive sector is transitioning from mechanical to mechatronic systems, requiring skills in embedded software, diagnostics, and automation. Logistics and supply chains are becoming increasingly data-driven, demanding digital fluency and systems thinking. These developments underscore a challenge that requires an urgent shift toward hybrid skill sets, where technical training must be complemented by digital, cognitive, and soft skills.
At the heart of this challenge lie the Industrial Training Institutes (ITIs), which have historically functioned as the primary institutional framework for skill development. However, in their current configuration, ITIs are some-what misaligned with the demands of a rapidly evolving economic and technological environment. While previous reform efforts— through targeted schemes— have yielded some progress in upgrading infrastructure and decentralising governance, these have largely been incremental and uneven in impact. The pace of industrial transformation, driven by automation, digitalisation, and the emergence of new sectors, has outstripped the capacity of ITIs to respond effectively.
What is now required is not a continuation of piecemeal reform, but a system-wide reimagination: a nationally scalable, industry-integrated transformation of ITIs that positions them as agile, forward-looking institutions. Such a shift must include the redesign of curricula, adoption of contemporary pedagogies, enhancement of instructor capabilities, and establishment of governance models that are responsive to labour market needs. Aligning vocational training with the skill requirements of both traditional and emerging industries will be pivotal in building a workforce that is not only employable, but instrumental in advancing India’s broader developmental vision of Viksit Bharat.
Responding to this imperative, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has taken a decisive step by approving the National Scheme for Industrial Training Institute (ITI) Upgradation and the Setting up of Five National Centres of Excellence (NCOE) for Skilling as a Centrally Sponsored Scheme.
Scheme Highlights
Funding Structure: Announced in the Union Budgets for 2025–26, the scheme carries a total financial outlay of Rs. 60,000 crore—comprising Rs. 30,000 crore from
the Central Government, Rs. 20,000 crore from State Governments, and Rs. 10,000 crore from industry, with co-financing of 50 per cent of the Central share equally supported by the Asian Development Bank and the World Bank. This is not merely a funding provision but a comprehensive blueprint for the structural transformation of vocational education in India.
Financing and Accountability Innova-tions: The inclusion of Rs. 10,000 crore in industry co-financing marks a major shift in the incentive structure, ensuring that employers have a direct stake in shaping training outcomes. Unlike earlier schemes, the new model empowers Special Purpose Vehicles (SPVs) and Institute Management Committees (IMCs) to make real-time, locally responsive decisions on curriculum, infrastructure, and operations. This decentralised governance, coupled with potential integration of outcome-based funding—linked to placement rates or industry performance benchmarks— can drive accountability and ensure that investments translate into measurable workforce impact.
Hub and Spoke Model: The scheme envisions the upgradation of 1,000 government ITIs under a hub-and-spoke model, with core hubs anchored in five National Skill Training Institutes (NSTIs) located in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana, which will be developed into National Centres of Excellence. These hubs will be equipped with advanced infrastructure, high-end training capacity, and specialised faculty, serving as centres of expertise that extend support to a network of spoke ITIs across the regions.
Government-Owned but Industry-Managed Institutions: At the heart of the scheme is the repositioning of ITIs as government-owned but industry-managed institutions, offering training that is directly aligned with market demand and sector-specific skill requirements, particularly in high-growth industries such as electronics, automotive, and renewable energy. Over a five-year period, the scheme aims to skill 20 lakh young people through revamped and industry-relevant courses.
Need-based Investment Model: For the first time, a need-based investment model has been introduced, moving away from uniform funding ceilings and allowing flexibility in financial allocation based on each institution’s specific requirements in terms of infrastructure, trade offerings, and regional economic context.
Special Purpose Vehicle Model: A key innovation under the new ITI Upgradation Scheme is the introduction of an industry-led Special Purpose Vehicle (SPV) model for implementation and governance. Unlike traditional administrative structures that often suffer from bureaucratic delays and fragmented accountability, the SPV model establishes a dedicated, professionalised entity responsible for planning, executing, and monitoring the upgradation and management of ITIs. These SPVs will be constituted with active representation from industry stakeholders, enabling real-time decision-making on matters such as curriculum updates, procurement of equipment, faculty development, and infrastructure investments. This model brings greater operational agility, allowing institutes to respond quickly to changing industry requirements and local labour market dynamics. Moreover, by placing industry at the centre of governance, the SPV ensures that vocational training is not designed in isolation but is closely aligned with sectoral trends, technological shifts, and employer expectations. This institutional shift marks a departure from earlier schemes, where industry involvement was largely advisory. With SPVs in place, the scheme embeds accountability and performance orientation into the core of ITI governance, making it a structurally robust and responsive framework for skilling India’s workforce.
Trainer Ecosystem Reform: The scheme aims to train 50,000 instructors through both pre-service and in-service programmes, focussing on technical upskilling, pedagogy, digital tools, and industry-specific practices. Training will be delivered via a blended model—combining online modules with hands-on sessions at upgraded National Skill Training Institutes (NSTIs) and industry facilities. Strategic partnerships with industry will ensure trainers are exposed to real-time technologies and workplace standards. Crucially, the scheme also seeks to address systemic issues in recruitment, retention, and motivation of ITI instructors by standardising qualifications, improving career progression, and linking performance to outcomes—ensuring instructional quality keeps pace with evolving skill demands.
Wider Industry Involvement: By embedding industry involvement in every layer of planning, delivery, and quality assurance, the scheme establishes a feedback loop that ensures vocational education remains dynamic, relevant, and future-ready.
Global Benchmarking: India’s approach to transforming Industrial Training Institutes (ITIs) reflects elements of successful international models while tailoring them to its own scale and context. Like Germany’s Dual Vocational Training System, it emphasises close collaboration between industry and training institutions, combining classroom instruction with practical, on-the-job expe-rience. South Korea’s Meister Schools serve as a reference for positioning vocational education as a prestigious, high-skill pathway aligned with advanced industry needs. Similarly, Singapore’s Institute of Technical Education (ITE) and SkillsFuture initiative inform India’s focus on lifelong learning and demand-driven skill development. What sets India apart is its unique blend of large-scale public investment, Rs. 10,000 crore in industry co-financing, and decentralised implementation through Special Purpose Vehicles (SPVs) and Institute Management Committees (IMCs). This model creates space for contextual innovation, enabling diverse regions and sectors to adapt global practices to local economic realities.
Why is the Restructuring Required?
Skill Mismatch and Workforce Readiness: According to several labour market assessments, over 45 per cent of ITI graduates remain unemployed or underemployed, reflecting a deep disconnect between training and labour market needs. This gap stems from outdated curricula, limited industry exposure, obsolete equipment, and insufficient emphasis on digital and soft skills. Employers in fast-growing sectors like electronics and renewable energy struggle to find job-ready candidates with the right mix of technical and adaptive capabilities. Bridging this divide requires reimagining vocational education as an agile, industry-integrated system—regularly updated, employer-validated, and responsive to evolving job roles.
State-Level Disparities: A key dimension often overlooked in vocational training reform is the significant disparity in ITI performance across states and regions. While industrialised states like Maharashtra, Gujarat, and Tamil Nadu have leveraged stronger industry linkages and better governance to modernise ITIs, many others—especially in eastern and northeastern regions—continue to struggle with under-resourced institutes, low enrolment, and limited private sector engagement. This uneven landscape not only hampers equitable access to quality training but also weakens the national skilling pipeline. The new scheme’s emphasis on need-based investment and hub-and-spoke infrastructure provides an opportunity to correct these imbalances by enabling targeted support to lagging regions, ensuring that every state has the capacity to align its vocational training ecosystem with local economic priorities and industry demand.
Integration with National Missions: The ITI Upgradation Scheme directly supports India’s flagship missions by building the skilled workforce they require. Make in India demands trained technicians for advanced manufacturing; Digital India relies on digitally literate workers across sectors; the Skill India Mission gains scale and relevance through modernised, industry-aligned ITIs; and the National Green Hydrogen Mission will need specialised skills in renewable energy systems and green technologies. By aligning vocational training with these strategic initiatives, the scheme provides the essential human capital backbone for their successful implementation.
Conclusion: The National Scheme for Industrial Training Institute (ITI) Upgradation and the establishment of National Centres of Excellence marks a bold and timely intervention in India’s skilling landscape—one that aligns vocational education with the accelerating pace of industrial, technological, and economic transformation. By reimagining ITIs as industry-integrated, digitally enabled, and outcome-focused institutions, the scheme addresses longstanding gaps in workforce readiness and institutional relevance. However, its true success will depend not only on effective rollout but on sustained momentum. In an era where technologies evolve in cycles measured not in decades but in quarters, the challenge is not just to modernise once, but to embed a culture of continuous renewal—of curricula, infrastructure, and pedagogy. As industries pivot rapidly towards automation, AI, green energy, and digital services, vocational training systems must become equally dynamic. The scheme lays the foundation, but its enduring impact will hinge on a long-term commitment to adaptability, accountability, and future-readiness.
(The author is a Delhi-based correspondent of an international multi-media platform. Views expressed are personal)