Examine the Hub-and-Spoke model of ITI upgradation under PM-SETU and its implications for Centre-state coordination in skill development.

PM-SETU (Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs), MSDE's ₹60,000 crore scheme, upgrades 1,000 government ITIs through 200 hub and 800 spoke institutes anchored by industry [1][2]. The model is a structural shift from state-run to industry-anchored vocational governance, but its success rests on Centre-state-industry alignment.

How the Hub-and-Spoke model works

• Each hub ITI, equipped with modern labs, smart classrooms and new-age trades, supports roughly four spoke ITIs, spreading scarce equipment and trainers across a cluster [1][3].
• Delivery is through an industry-led Special Purpose Vehicle (SPV) in which the Anchor Industry Partner holds majority management control, collaborating with the State Government [2].
• Industry submits a Strategic Investment Plan (SIP) against an RFP; the National Steering Committee, chaired by Secretary, MSDE, approves it [4].
• Funding is tripartite — Centre ₹30,000 crore, States ₹20,000 crore, industry ₹10,000 crore — making it a genuine cost-sharing PPP [2].

Merits demonstrated so far

• Visakhapatnam ITI Cluster (ArcelorMittal Nippon Steel India, with NAMTECH) received the first SIP approval, making Andhra Pradesh the pioneer state [5].
• Nationwide rollout across 200 clusters followed, with SIPs worth ₹1,237.58 crore in Odisha, Gujarat and Telangana under Jindal, ArcelorMittal and Apollo Med-Skills [4].

Implications for Centre-state coordination

• Cooperative federalism in practice: ITIs are state-administered, yet selection is state-led in consultation with industry, with proposals routed through State Steering Committees to the NSC [6][4] — a two-tier structure replacing ad hoc MoUs.
• Competitive federalism risk: SIPs follow industrial density, so industrially weaker states may attract fewer anchors, widening regional skill gaps.
• Fiscal and autonomy friction: the 33% state share strains fiscally weak states, while majority industry control raises questions of public accountability over public assets.

The Hub-and-Spoke design sensibly concentrates capital where it multiplies. Its promise will be realised if the NSC actively hand-holds low-industry states, ties SIP approval to placement outcomes, and preserves equitable access — advancing NEP 2020's vocational goals and SDG-4 and SDG-8.