National Scheme for Industrial Training Institute (ITI)

Why in News? The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a National Scheme for Industrial Training Institute (ITI) Upgradation and the establishment of five National Centres of Excellence (NCOE) for Skilling.

Relevance : UPSC Pre &  Mains

Prelims : Special Purpose Vehicle (SPV) model/ NHIDCL/ BOT (Build-Operate-Transfer) and HAM (Hybrid Annuity Model).

Mains :   GS Paper 2: Governance, Social Justice, and Education/GS Paper 3: Economic Development, Employment  and Industry.

Key Objectives and Components:

Upgradation of 1,000 ITIs:

• Implemented in a hub-and-spoke model to align with industry needs.
• Focus on revamping trades (courses) to match modern industry demands.
• Aim to make ITIs government-owned, industry-managed aspirational skill institutes.
• Over 5 years, 20 lakh youth will be trained to meet industry human capital needs, particularly for MSMEs and high-growth sectors like electronics, automotive, and renewable energy.

Capacity Augmentation of Five National Skill Training Institutes (NSTIs):

• NSTIs in Bhubaneswar, Chennai, Hyderabad, Kanpur, and Ludhiana will be upgraded.
• Establishment of five National Centres of Excellence for Skilling within these NSTIs.
• Infrastructure improvements for Training of Trainers (ToT)
• 50,000 trainers will receive pre-service and in-service training.

Implementation Strategy:

• Industry-led Special Purpose Vehicle (SPV) model for outcome-driven execution, ensuring sustained industry collaboration in planning and management.
• Need-based investment to address specific infrastructure, capacity, and trade-related requirements of each ITI, overcoming limitations of past schemes.
• Flexible fund allocation to support capital-intensive, new-age trades and infrastructure upkeep.

Significance:

• Addresses longstanding challenges in ITI infrastructure, course relevance, employability, and perception of vocational training.
• Creates a pipeline of employment-ready workers to meet industry demands, reducing skill shortages in critical sectors.
• Aligns with the Viksit Bharat vision, positioning ITIs as key enablers of India’s goal to become a global manufacturing and innovation hub by 2047.
• Enhances economic growth and productivity through a robust vocational education ecosystem.

Background:

• ITIs, operational since the 1950s under State Governments, are critical to India’s vocational training framework.
• The ITI network has grown by 47% since 2014, with 14,615 ITIs and 14.40 lakh enrollments.
• Despite growth, ITIs face challenges like outdated infrastructure, lack of industry-aligned courses, and low aspirational appeal.
• Previous upgradation schemes were insufficient due to suboptimal funding and lack of systemic interventions.
• This scheme builds on past efforts, introducing a nationally scalable program to reimagine ITIs with industry-relevant courses and modern infrastructure.

 Key Features:

Legal Independence:

• SPVs are separate legal entities, distinct from their parent organizations. This ensures financial risks or obligations remain confined to the SPV.

Limited Purpose:

• Established to achieve a specific goal, such as executing a single project or managing an asset.

Ownership Structure:

• May be owned by one or multiple stakeholders, including governments, private companies, or financial institutions.

Asset Protection:

• Assets held by the SPV are shielded from the creditors of the parent company.

Examples of SPVs in India:

GeM SPV (Government e-Marketplace):

• A national public procurement portal established by the government to facilitate online procurement by government buyers.

Smart City SPVs:

• SPVs are used to develop and manage various aspects of smart city projects.

Metro Rail SPVs:

• SPVs are formed to plan, build, and operate metro rail systems in different cities.

Power Transmission SPVs:

• SPVs are used for power transmission projects, particularly in renewable energy and grid development.

Road Projects SPVs: SPVs are used for various road projects, including the National Highway Infrastructure Development Corporation (NHIDCL).