Cabinet Approves ₹60,000 Crore Scheme to Transform ITIs and Set Up National Centres of Excellence for Skilling

New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi has approved the National Scheme for Industrial Training Institute (ITI) Upgradation and the establishment of five National Centres of Excellence (NCOEs) for Skilling. The ambitious initiative will be implemented as a Centrally Sponsored Scheme, with an overall outlay of ₹60,000 crore, combining contributions from the Centre, States, and industry.

The scheme was first announced during the Union Budgets of 2024–25 and 2025–26, and will be co-financed by the Asian Development Bank and the World Bank, each covering 25% of the Centre’s share.

The scheme proposes to upgrade 1,000 Government ITIs through a hub-and-spoke model, offering revamped courses aligned with emerging industry needs. It also involves capacity augmentation of five National Skill Training Institutes (NSTIs) located in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana, which will house the new National Centres of Excellence.

The central aim is to transform ITIs into government-owned, industry-managed aspirational institutions, strengthening the link between vocational training and employment opportunities. The initiative is expected to skill 20 lakh youth over five years, providing training in high-demand sectors such as automotive, electronics, and renewable energy.

A major departure from past schemes, this initiative includes need-based investment provisions, allowing institutions to receive funds tailored to their specific infrastructure and trade requirements. It will adopt a unique Special Purpose Vehicle (SPV) model, led by industry players, to ensure focused and outcome-driven implementation.

Officials noted that previous funding models fell short of enabling comprehensive infrastructure development and trade modernization. The new scheme addresses these shortcomings by promoting flexible and sustained industry engagement in both planning and management.

Apart from upgrading physical infrastructure, the scheme will also focus on strengthening trainer capacity. Training of Trainers (ToT) facilities will be improved, and pre-service and in-service training will be provided to 50,000 trainers, ensuring high-quality instruction across upgraded ITIs.

By realigning the ITI ecosystem with the needs of modern industries and introducing advanced courses in capital-intensive trades, the scheme seeks to overcome challenges in employability, perception, and infrastructure that have traditionally hindered vocational education in India.

The initiative is a key component of the Prime Minister’s vision of “Viksit Bharat”, where skilling is seen as a foundational enabler for economic growth and industrial development. It will provide employment-ready talent to industries, especially MSMEs, by improving the alignment between local workforce supply and national demand.