MODERNIZATION OF ITI UNDER PM-SETU AND AVGC SKILLING

1. At a Glance

PM-SETU (Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs) is a Centrally Sponsored Scheme to modernise 1,000 government ITIs and capacitate 5 NSTIs as National Centres of Excellence (NCoEs) for skilling, with a total outlay of ₹60,000 crore [S2][S3].
The AVGC-XR NCoE (Animation, Visual Effects, Gaming, Comics & Extended Reality) is being set up as a Section 8 company in Mumbai to anchor sectoral skilling under the Media & Entertainment Skills Council (MESC) [S4].
Together they drive skill-gap closure in two strategic axes: traditional industrial trades (via hub-spoke ITIs) and the creative-technology sunrise sector (AVGC-XR) [S1][S4].

MSDE Budget Estimate for FY 2026-27 = ₹9,540.50 crore vs ₹5,749.90 crore in FY 2025-26 — a ~66% jump primarily driven by PM-SETU's enhanced outlay [S1].
A new "Integrated Scheme in Skilling Architecture" (₹600 crore) appears in FY 2026-27 BE [S1].
PIB release dated 1 April 2026 by the Ministry of Skill Development & Entrepreneurship (MSDE) [S1].

ITI system: governed by the DGT (Directorate General of Training) under MSDE; ITIs are the backbone of long-cycle vocational training in India.
Union Cabinet approved PM-SETU in May 2025, subsuming earlier proposals for ITI revamp and NCoE creation [S2].
AVGC Promotion Task Force constituted by Ministry of I&B in April 2022; its 2022 report recommended a National AVGC-XR Mission [S4].
MESC (Media & Entertainment Skills Council) under NSDC drives AVGC sectoral skilling; 20 lakh skilled professionals projected as decadal requirement [S4].

Implementing Ministry: Ministry of Skill Development & Entrepreneurship (MSDE) [S1].
PM-SETU outlay: ₹60,000 crore — Central ₹30,000 cr, State ₹20,000 cr, Industry ₹10,000 cr [S2].
Co-financing: 50% of Central share by Asian Development Bank (ADB) and World Bank, equally [S2].
Coverage: 1,000 Government ITIs — 200 Hub + 800 Spoke on hub-and-spoke model [S2].
NSTI capacity augmentation locations: Bhubaneswar, Chennai, Hyderabad, Kanpur, Ludhiana [S2].
AVGC-XR NCoE: Section 8 Company; Mumbai, Maharashtra [S4].
Maharashtra AVGC-XR Policy 2025: outlay ₹3,268 crore, roadmap to 2050 [S4].
Karnataka AVGC-XR Policy: 2024–2029 [S4].
MSDE FY 2026-27 scheme split (₹ crore): Skill India Programme (PMKVY+JSS+PM-NAPS) 2,800; Integrated Skilling Architecture 600 [S1].
State Steering Committees: 32 States/UTs constituted (chaired by Chief Secretary); 15 States/UTs floated industry-interest proposals [S2].

Economic: Industry contribution of ₹10,000 cr signals PPP-led skilling; aligns ITI output to industry demand to lift labour productivity [S2]. AVGC-XR targeted as a sunrise export sector [S4].
Administrative: Hub-and-spoke avoids spreading capex thin; state co-financing model embeds cooperative federalism but execution depends on State Steering Committees [S2].
Social: ITIs are the dominant skilling channel for Class-10 pass, semi-urban/rural youth; modernisation addresses obsolete curricula and low placement.
Scientific/Technological: Smart classrooms, modern labs, AI/AR/VR-aligned trades; AVGC-XR NCoE focuses on extended reality, gaming engines, VFX pipelines [S2][S4].
Geopolitical/Strategic: ADB + World Bank co-financing reflects multilateral backing for India's demographic-dividend strategy [S2].

May 2025: Union Cabinet approves PM-SETU [S2].
Sep 2025: Maharashtra notifies AVGC-XR Policy 2025 (₹3,268 cr) [S4].
FY 2026-27 (1 Apr 2026): MSDE BE raised to ₹9,540.50 cr; new Integrated Scheme in Skilling Architecture (₹600 cr) introduced [S1].
32 States/UTs operationalise State Steering Committees; 15 invite industry partners [S2].

PM-SETU full form: Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs [S1].
Type: Centrally Sponsored Scheme (not Central Sector) [S2].
Total outlay: ₹60,000 crore; Centre:State:Industry = 30,000 : 20,000 : 10,000 [S2].
Co-financiers: ADB and World Bank, splitting 50% of Central share equally [S2].
ITIs covered: 1,000 (200 Hub + 800 Spoke) [S2].
Five NSTIs upgraded: Bhubaneswar, Chennai, Hyderabad, Kanpur, Ludhiana [S2].
Cabinet approval month: May 2025 [S2].
AVGC-XR NCoE legal form: Section 8 Company, located in Mumbai [S4].
AVGC Task Force constituted by Ministry of Information & Broadcasting (April 2022) [S4].
MSDE FY 2026-27 BE: ₹9,540.50 crore (vs ₹5,749.90 cr in 2025-26) [S1].
New scheme line in 2026-27: Integrated Scheme in Skilling Architecture, ₹600 cr [S1].
State Steering Committee chair: Chief Secretary of State/UT [S2].
Apex skilling council for AVGC: MESC under NSDC [S4].

GS-II: Government policies & interventions for vulnerable sections; Centre–State financing under CSS.
GS-III: Indian economy — employment, skill development, growth & sunrise sectors.
Question stems: 1. "Critically assess whether the hub-and-spoke ITI upgradation model under PM-SETU can bridge India's industrial skill gap." (GS-III, 15 marks) 2. "Examine the role of multilateral financing (ADB, World Bank) in domestic skilling architecture." (GS-II/III, 10 marks) 3. "AVGC-XR represents India's next sunrise sector. Discuss the policy and skilling ecosystem needed to capture global market share." (GS-III, 15 marks)

PMKVY 4.0 — primary short-term skilling scheme under MSDE.
PM-NAPS — apprenticeship promotion, complements ITI placement.
National Education Policy 2020 — vocationalisation of school education feeds ITI pipeline.
National AVGC-XR Mission — Task Force recommendation, MIB.
NSDC & Sector Skill Councils — institutional architecture above ITIs.
Skill India Digital Hub (SIDH) — digital backbone for skilling.
DGT and Craftsmen Training Scheme (CTS) — statutory base of ITI courses.
Demographic dividend & labour force participation — macro context.

Wrong scheme type: PM-SETU is Centrally Sponsored, NOT Central Sector [S2].
Wrong ministry for AVGC Task Force: It was constituted by MIB, not MSDE or MeitY [S4].
Confusing NSTIs (5) with NCoEs; the 5 NSTI cities (Bhubaneswar/Chennai/Hyderabad/Kanpur/Ludhiana) often misattributed [S2].
PM-SETU does not replace PMKVY — both coexist in the FY 2026-27 BE [S1].
AVGC-XR NCoE is a Section 8 (not-for-profit) company, not a statutory body [S4].

[S1] MODERNIZATION OF ITI UNDER PM-SETU AND AVGC SKILLING (PIB, 01 Apr 2026, PRID 2247753) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2247753 — (tier: 1)
[S2] Cabinet approves National Scheme for ITI Upgradation and Five NCoEs (PIB, PRID 2127415); ITI UPGRADATION UNDER PM SETU (PRID 2243982); OBJECTIVES OF PM-SETU SCHEME (PRID 2222121) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2127415 — (tier: 1)
[S3] UPGRADATION OF ITIs (PM-SETU) SCHEME (PIB PRID 2240634) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2240634 — (tier: 1)
[S4] Powering the AVGC-XR Revolution (PIB PRID 2191085); AVGC Task Force Report (PRID 1886679); MIB AVGC Task Force constitution (PRID 1814698) — https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2191085 — (tier: 1)