PM-SETU marks a shift from government-run to industry-led vocational training. Examine how far the hub-and-spoke SPV model can address the employability deficit of ITI graduates.

PM-SETU is a ₹60,000-crore Centrally Sponsored Scheme. It will upgrade 1,000 Government ITIs as 200 hubs and 800 spokes. Each cluster is run by an industry-majority SPV, and its anchor partner drafts the Strategic Investment Plan (SIP) [1]. The model directly targets the demand-side causes of poor employability. It does much less about the supply-side weaknesses.

How the model addresses the deficit

• Demand-led trades: anchor partners come from each region's main sector, such as ArcelorMittal Nippon Steel in Surat and Apollo Med-Skills in Hyderabad [2]. This tackles the old mismatch between what ITIs teach and what employers need.
• Industry has a financial stake: industry contributes ₹10,000 crore alongside the Centre's ₹30,000 crore and the States' ₹20,000 crore [1]. Its own money gives it a reason to place trainees.
• Hub-to-spoke spread: quality reaches rural and women's institutes, for example the Kangan and Khultabad spokes and Govt ITI Aundh (Women) [3].
• Better teaching: 3,744 trainers have been trained through NSTIs. The NSC has also pushed clusters towards ISO certification and WorldSkills-aligned trades [3].

Limits of the model

• Teacher shortage: in one state, NITI Aayog found only 14.11% of sanctioned instructor posts filled [4]. Training existing trainers does not fill vacant posts.
• Outcomes are not tracked: NITI found only 0.09% of trainees recorded as placed, the MIS out of date, and placement cells staffed by instructors [4].
• Capture by the anchor firm: one firm shapes five ITIs. The WorldSkills nudge is only advice, so trainees risk learning narrow skills suited to one employer.
• Lesson from PMKVY: CAG found only 41% of certified candidates placed, because job roles were chosen without a skill-gap analysis [5].
• Slow pace: after one year, SIPs covered only 14 of 200 clusters (₹3,446 crore) [6]. These are approvals, not money spent.

Way forward

• Make a district-wide skill-gap study mandatory in every SIP.
• States should fill sanctioned instructor posts and hire dedicated placement officers.
• Run a public dashboard of funds and outcomes for each cluster, covering money released and spent, enrolment, certification and placement.

The hub-and-spoke SPV model fixes the relevance gap in ITI training. Its employability gains will depend on teachers, data and accountability, which the State must still provide. If PM-SETU links both, it can turn India's demographic dividend into decent jobs, in line with SDG 4.4 and 8.6.