Health & SocialImportant2025-05-07

National Scheme for ITI Upgradation Approved

In News

What Happened

On May 7, 2025, the Union Cabinet approved a Rs 60,000 crore Centrally Sponsored Scheme to upgrade 1,000 Industrial Training Institutes (ITIs) over a five-year period. The initiative also includes the establishment of five National Centres of Excellence. The project will be co-financed by multilateral institutions, specifically the World Bank and the Asian Development Bank (ADB).

Why It Matters

This initiative is crucial for bridging the employability gap by aligning outdated vocational training with modern, high-tech industry demands. By skilling the workforce for contemporary sectors, India aims to effectively harness its demographic dividend and boost its manufacturing competitiveness globally.

Background

History & Context

Industrial Training Institutes (ITIs) were established under the Directorate General of Training (DGT) to provide grassroots vocational education, but many suffered from outdated curricula and poor infrastructure. The Skill India Mission, launched in 2015, alongside the National Education Policy 2020, emphasized the need to revamp vocational training. This new scheme builds on earlier, smaller-scale modernization efforts like the World Bank-assisted STRIVE (Skills Strengthening for Industrial Value Enhancement) project to create a comprehensive overhaul.

What Changed

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BEFORE: ITI modernization was often fragmented with limited domestic budgetary allocations. NOW: A dedicated, massive Rs 60,000 crore Centrally Sponsored Scheme with backing from both the World Bank and ADB ensures sustained financial support.
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BEFORE: The curriculum and infrastructure in most state-run ITIs catered heavily to legacy manufacturing and traditional trades. NOW: 1,000 ITIs will be heavily upgraded, and five National Centres of Excellence will be created to focus on advanced, future-ready skills demanded by modern industries.
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BEFORE: Vocational education often operated in silos, separated from global best practices. NOW: International co-financing and the creation of targeted Centres of Excellence aim to elevate Indian vocational training frameworks to global industry standards.

Prelims Angle

NCERT Connection

This relates to Class 11 Economics Chapter 5 (Human Capital Formation in India). The scheme is a practical application of increasing expenditure on education and training to build human capital, thereby improving labor productivity and enabling the workforce to absorb new technologies.

Practice Questions

Q1

Correct Statement(s)

With reference to the newly approved scheme for ITI upgradation, consider the following statements: 1. It is a Central Sector Scheme funded entirely by the Ministry of Skill Development and Entrepreneurship. 2. The scheme will be co-financed by the World Bank and the Asian Development Bank (ADB). Which of the statements given above is/are correct?

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