Industry-led governance of ITIs under PM-SETU marks a shift from supply-driven to demand-driven vocational training. Critically examine the opportunities and risks of this model.

PM-SETU is a ₹60,000-crore Centrally Sponsored Scheme. It upgrades 1,000 government ITIs through a hub-and-spoke model [1], and industry, not the State, sets what is taught. The shift is promising, but ownership alone cannot guarantee jobs.

Opportunities

• Industry shares the risk: Industry contributes ₹10,000 crore. The Anchor Industry Partner (AIP) holds 51% of each cluster SPV, and the Centre and State hold 24.5% each [1][2]. Under the earlier PPP scheme, an industry partner chaired the Institute Management Committee, but the ₹2.5 crore per ITI was an interest-free government loan [3]. That gave industry control without risk.
• Training matched to demand: The AIP's Strategic Investment Plan aligns trades, labs and curricula with what employers need [4].
• Built-in discipline: Funds are released only after the SPV is formed [4].
• Cooperative federalism at scale: Costs are shared 30:20:10 between Centre, States and industry, and each hub supports about four spokes [1]. Fourteen SIPs worth ₹3,446 crore had been approved by October 2026 [2].

Risks

• Skills too narrow for one firm: The anchor partner writes the SIP, so it may teach only the trades its own plant needs. The North-East clusters at Jorhat and Tinsukia are anchored by oil PSUs (NRL, OIL), even though the region's skilling push centres on tourism [5].
• "Industry" that is really public money: When PSUs are the anchors, private employers do not actually share the risk.
• Uneven reach: Clusters need an anchor firm, and funds wait for an SPV to form [4]. Industry-poor hill states and backward districts may lag.
• Quality, not just governance: IIPA's 2019 evaluation found that training quality stayed low in PPP-mode ITIs [6]. Owning shares does not supply instructors.
• Outcomes not tracked: Official MIS data recorded only 405 placements out of 4,14,247 trainees [6], while the one-year review reports inputs, not jobs [2].
• Accountability: When a public institution is mostly privately controlled, fees, inclusion and audit need safeguards.

On balance, PM-SETU fixes the earlier flaw of control without risk and is a real move towards demand-driven training. To protect the public purpose, every SPV could be required to offer some broad, NSQF-certified trades. Groups of employers working with Sector Skill Councils could act as anchors in hill states. Continued funding could depend on published placement and wage data. With these safeguards, the scheme can turn the demographic dividend into decent work (SDG 8).