The World Bank has sanctioned $830 million as loan to support the central government’s Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM SETU) scheme.

PM-SETU aims to improve the quality of training delivery in India’s Industrial Training Institutes (ITIs) and NSTIs, modernise infrastructure and equipment as per industry standards, introduce industry-aligned long-term and short-term courses (especially in new and emerging sectors), strengthen industry linkage for demand-driven skilling and better employment outcomes and enhance the capacity of National Skill Training Institutes (NSTIs) for training of trainers.

The World Bank’s ‘Supporting PM-SETU Programme’, prepared jointly with the Asian Development Bank, is expected to bring private sector investment into the ITI system by mobilising at least $680 million in private capital.

“With more than 12 million people entering the labor market every year, job creation is a national priority for India,”  said Paul Procee, Acting Country Director, World Bank India. “Private sector-led job creation is at the heart of the World Bank Group’s new Country Partnership Framework for India. By supporting India’s $4 billion investments to upgrade ITIs, this Programme will embed industry-driven training across the system so that high placement rates become the norm, not the exception.”

While most of the trades offered in ITIs, such as electrician, mechanic, or welder, are traditionally male dominated, the programme intends to update curricula and over the next five years, ensure that at least 25% of ITI students are women, helping them gain access to better-paid jobs.

“The Programme will now help ITIs provide a more balanced mix of training, consultancy, and production functions so that they can generate their own revenues to expand and improve training,” said Marguerite Clarke and Toby Linden, the task team leaders of the Programme. “Through a hub-and-spoke model with extension centres, the institutes will become specialised and resource-efficient centres of excellence.”

The $830 million loan has a final maturity of 19.5 years, including a grace period of four years.

India’s youth account for roughly 72% of the unemployed, and there is a persistent skills mismatch—between what young people are trained for and what firms need—which continues to constrain productivity, firm growth, and earnings.