$830 million World Bank funding to boost skills, jobs through ITIs

The World Bank’s Board of Executive Directors has approved an $830 million loan to revamp India’s network of Industrial Training Institutes (ITIs), aiming to align skills training with labour market needs and increase employment for young graduates.

The Supporting Pradhan Mantri Skilling and Employability Transformation Through Upgraded ITIs (PM-SETU) Program intends to produce more than a million skilled workers annually and mobilise at least $680 million in private investment.

“With more than 12

million people entering the labour market every year, job creation is a national priority for India,” said Paul Procee, Acting Country Director, World Bank India.

“By supporting India’s $4 billion investments to upgrade ITIs, this Program will embed industry-driven training across the system so that high placement rates become the norm, not the exception.”

The Program will also update curricula, ensure at least 25% of ITI students are women, and help institutes generate their own revenues through a hub-and-spoke model with extension centres.

The loan has a final maturity of 19.5 years, including a four-year grace period.

It is pertinent to note that PM-SETU adopts a hub-and-spoke model: 200 advanced "hub" ITIs with cutting-edge infrastructure, trainer academies, incubation centres, and industry-linked production units; 800 "spoke" ITIs extend access district-wide.

It emphasises government-owned but industry-managed operations via Special Purpose Vehicles (SPVs) with anchor firms, targeting high-demand sectors like manufacturing, EVs, AI, green energy, textiles, and construction.

Similar to PM-SETU's $830M ITI revamp, World Bank's past loans include $50M (2015) for Nai Manzil minority skilling and multi-billion programs for rural employment (e.g., NREGS-linked), urban development, and vocational training via IDA credits with long maturities.