World Bank Approves $830 Million to Upgrade India’s Skills Training Institutes, Boost Youth Employment

by T. Vishnudatta Jayaraman February 3, 2026

By T. Vishnudatta Jayaraman February 3, 2026 0 comments 3 minutes read

Courtesy: The World Bank Group

The World Bank’s Board of Executive Directors has approved financing to modernize India’s network of skills training institutes, aiming to better align training with “labor market needs” and expand job opportunities for the millions of graduates entering the workforce each year.

The $830 million loan carries a final maturity of 19.5 years, including a four-year grace period, the World Bank said.

Jobs are central to India’s “growth trajectory, competitiveness,” and its ambition of becoming Viksit Bharat, the World Bank Group said on February 2. Youth account for roughly 72 percent of the “unemployed” in India, the World Bank noted, highlighting a persistent skills mismatch between training outcomes and employer needs. This gap continues to constrain “productivity, firm growth, and earnings.”

India’s Industrial Training Institutes (ITIs) play a key role in skilling young people, but many face significant challenges, including inadequate facilities, a shortage of qualified trainers, and limited resources to meet industry standards. As a result, graduate job placement rates remain below 50 percent, according to the World Bank.

“With more than 12 million people entering the labor market every year, job creation is a national priority for India,” said Acting Country Director, World Bank India, Paul Procee. “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 Program will embed industry-driven training across the system so that high placement rates become the norm, not the exception.”

The Supporting Pradhan Mantri Skilling and Employability Transformation Through Upgraded ITIs (PM-SETU) Program, backed by an $830 million World Bank loan, seeks to revamp the ITI network to better match skills training with labor market demand. The program aims to produce more than one million better-skilled workers annually and facilitate greater workforce participation among young graduates.

Prepared jointly with the Asian Development Bank, the program is also expected to attract private sector investment into the ITI system by mobilizing at least $680 million in private capital, the World Bank said.

The World Bank further noted that many trades offered in ITIs, including “electrician, mechanic, or welder,” have traditionally been “male” dominated. Over the next five years, the program will update curricula and work to ensure that at least 25 percent of ITI students are “women,” supporting access to better-paying jobs.

“The Program 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 program’s task team leaders. “Through a hub-and-spoke model with extension centers, the institutes will become specialized and resource-efficient centers of excellence.”