Public Private Partnership

Need For Launch

Out of 1896 Government ITIs in the country (as on 1.1.2007), 500 Government ITIs are being upgraded into Centers of Excellence under a scheme started from 2005-06. In his Budget Speech 2007-08, Hon. Union Finance Minister announced upgradation of remaining 1396 Government ITIs into Center of Excellence through Public Private Partnership. Accordingly, this scheme with total outlay of Rs 3665 crore (Rs. 3490 crore for upgradation of 1396 ITIs @Rs. 2.5 crore per ITI and Rs 175 crore for management, monitoring and evaluation of the scheme) was framed. In its meeting held on Dt. 25.10.2007, CCEA had given, in principle approval for the Scheme for the XI Five Year Plan period and financial approval of Rs. 750.04 Crore for the year 2007-08 for the first batch of 300 ITIs.

CCEA, in its meeting held on Dt. 03.10.2008, had given approval for upgradation of remaining 1096 Government ITIs during the period 2008-09 to 2011-12 with a total outlay of Rs. 2800 Crore (Rs. 2740 Crore for upgradation of 1096 Government ITIs @ of Rs. 2.5 Crore per ITI and Rs. 60 Crore for management, monitoring and evaluation of the Scheme).


  • Modernize the Government ITIs.
  • Provide Quality Training through well trained & qualified Instructors.
  • Enhance the employability of the ITI trainees by providing qualitative training.
  • Capacity expansion as per Local Needs.
  • Keep pace with Technological demand of the industry.
  • Expand universe of knowledge & to produce World Class Skilled workforce.
  • To improve the employment outcomes of graduates from the Vocational Training System, by making design and delivery of training more demand responsive.

Salient Features

  • An Industry Partner (IP) is associated with each ITI to lead the process of Upgradation.
  • Institute Management Committee (IMC) is constituted with IP as Chairperson.
  • In IMC four members are nominated by IP, Five by State Govt. & Principal of ITI to be Ex – Officio member secretary.
  • Memorandum of Agreement (MoA) is signed amongst the IP, State & Central Govt.
  • Institute Development Plan (IDP) is prepared by IMC giving Key Performance Indicators(KPIs) & financial requirements for next five years.
  • IMC is registered as a society under Society Registration Act 1860.
  • IMCs are given Financial & Academic Autonomy.
  • IMC will be allowed to determine 20% of the admissions.
  • After approval of IDPs by State Steering Committee (SSC), Central Govt. releases interest free loan of Rs.2.5cr. directly to IMC and which will be repaid by IMC in 20 years (11th year to 30th year).

Selection of ITI and Industry

For each ITI to be covered under this Scheme, one Industry Partner is associated to lead the process of upgradation in the ITI. The Industry Partner is identified by the State Government in consultation with Industry Associations.

Formation of IMC and its registration as a society

a. An Institute Management Committee (IMC) is constituted/ reconstituted for each selected ITI. The IMC is converted by the State Government into a Society under relevant Societies Registration Act. The IMC registered as a society is entrusted with the responsibility of managing the affairs of the ITI under the Scheme.

b. The IMC is led by the Industry Partner. In the IMC, the members are as follows:

  • Industry Partner or its representative as Chairperson.
  • Four members from local industry to be nominated by the Industry Partner in such a way that the IMC is broad based.
  • Five members nominated by the State Govt.

1. District Employment Officer,

2. One representative of the State Directorate dealing with ITIs,

3. One expert from local academic circles,

4. One senior faculty member,

5. One representative of the students.

  • Principal of the ITI, as ex – officio member secretary of the IMC Society.

Role of Industry Partner

Though financial contribution by the Industry Partner is not a pre – condition to participate in the Scheme, however it is desirable if Industry Partner contributes financially in the upgradation of the ITI. The Industry Partner may contribute machinery, tools and equipment etc. which may be instrumental in furthering the objectives of this Scheme. It also arranges to provide training to the faculty members and on the job training to the students of the ITI.

Role of State Government

The administrative control of the staff of the ITI remains with the State Government and it continues to pay their salaries and other emoluments. The State Government is required to ensure that the sanctioned strength of the instructors in the ITI is always filled up and in no case the vacancies exceed.

10% of the sanctioned strength at any point of time. They are required to ensure that all additional positions required by the ITI are sanctioned and filled up on priority. It has to ensure provision of funds to meet office, administrative and other running expenses of the ITI. The State Government, as the owner of the ITI, continues to regulate admissions and fees except upto 20% of the admissions which are determined by the IMC.

Monitoring Agencies

a. The Central Government has constituted a National Steering Committee (NSC) with adequate representation from industry, State Governments and other Central Government Departments to act as an Apex body for guiding implementation and monitoring of the Scheme. It has also set up a National Implementation Cell (NIC) at the Central level for management, monitoring and evaluation of the Scheme.

b. To monitor implementation of the Scheme at the State level, the State Government has set up a State Steering Committee (SSC) with adequate representation from the Industry. The SSC is assisted by a State Implementation Cell (SIC) with sufficient staff for management, monitoring and evaluation of the Scheme at State level.

Institute Development Plan

The interest free loan is released to the IMC is directly on the basis of an Institute Development Plan (IDP) prepared by it. The IDP is developed in such a way that it leads to upgradation of the ITI as a whole. Simultaneous upgradation in a particular trade sector may also be taken up. The IDP defines the long term goals of the Institute, the issues and challenges facing the Institute and the strategies for dealing with them. It sets targets for institutional improvement, define Key Performance Indicators and detail the financial requirement with year-wise break up to meet the needs. The IDP is submitted to the State Steering Committee (SSC), which scrutinizes it and forwards to the Central Government for release of funds. Format for Institute Development Plan is enclosed at Annex-II.

Conditions for use of Funds of IMC

The interest free loan received by the IMC is kept in a separate bank account opened in the name of the IMC in a public sector bank. Any private contributions, special grants received from State Government and revenue generated by the IMC is also deposited in this bank account. The loan amount may be used for providing additional civil work in the ITI, which shall not exceed 25% of the total loan amount; for use as seed money, which shall not exceed 50% of the total loan amount; for procurement of machinery and equipment and for other activities directly related to upgradation of training infrastructure in the ITI. Any deviation from this pattern of use of funds has to be justified by the IMC and prior approval obtained from the NSC.

The following procedure is followed for utilization of funds received by them as interest free loan from the Central Govt. under the Scheme

  • Except for some contingent expenses of upto Rs. 5000/- at a time, all expenditure made out of the funds of the IMC Society shall have the administrative approval of the Governing Council of the IMC Society.
  • The following authorities in the IMC Society have financial power to incur expenditure of any nature (works, procurement of goods, services, consultancy etc.) upto the monetary limits mentioned below:
  • 1 ITI Principal/Secretary, IMC Society Upto Rs. 15,000
    2 Works and Procurement Committee of IMC Society Above Rs.15,000 and upto Rs.10 lakh
    3 Governing Council of the IMC Society Above Rs. 10 lakh

  • 1 Chairperson/Vice-Chairperson of IMC Chairperson
    2 Member Secretary of IMC Member
    3 Senior faculty member nominated in IMC Member
    4 One industry member nominated in IMC Member

    Detailed Guidelines regarding financial and procurement procedure is enclosed at Annex-IV.

    Repayment of Loan and Books of Accounts

    a. For the repayment of loan, there is a moratorium of ten years from the year in which the loan is released to the IMC. After the moratorium, the loan is payable by the IMC in equal annual installments over a period of twenty years, the first installment repayable from the 11th anniversary of the day of drawl. In case of default in payment of installment of the loan the NSC may impose penalty on such overdue payments or take any other action deemed fit.

    b. The IMC maintains regular books of accounts, gets them audited and prepares annual reports and statements of accounts as required under the relevant Societies Registration Act. The Central Government may call for its books of accounts, vouchers, documents, etc. relating to any accounting year and also authorize an officer for their inspection.

    Key Performance Indicators

    With the broad objective of improving the quality of training leading to better employability, all the three parties jointly agree and finalise Key Performance Indicators (KPIs) as yearly targets for next five years, for improving the internal as well external efficiency of the ITI against the base line information. These parameters are used to evaluate the success of the scheme during and after the project period. The agreed KPIs signed by the IMC and the State Government are appended to the MoA.

    Steps For Operationalisation

    The various steps required for operationalisation of the Scheme are as follows :

    • For each ITI covered under the Scheme, one Industry Partner is to be identified by the State Government in consultation with the Industry Associations. The ITIs identified for upgradation under the Scheme should be affiliated to National Council for Vocational Training (NCVT).
    • If IMC does not exist in the selected ITI, it has to be constituted as per the composition given in the Memorandum of Agreement. If IMC already exists, it may have to be reconstituted in view of the fact that under this scheme, the Chairperson of the IMC will be Industry Partner or its representative. The other four members from the industry are also nominated by the Industry Partner in such a way that the IMC is broad based. The five members to be nominated by the State Government are as follows:- i) District Employment Officer, ii) One representative of the State Directorate dealing with ITIs, iii) One expert from local academic circles, iv) One senior faculty member of the ITI, v) One representative of the trainees.
    • Once the IMC is constituted/reconstituted, it has to be got registered as a society under the Societies Registration Act applicable in the State. For registration of the Society, model Memorandum of Association and Rules & Regulations of the Society as given in Annex-II may be used after incorporating any changes which may be necessary in view of the requirements of the respective State Acts.
    • After registration of the IMC as a society, the Memorandum of Agreement (MoA) has to be signed among the Central Government, State Government and the representative of Industry Partner (who will sign on behalf of Industry Partner as well as on behalf of the IMC as its Chairman). Simultaneously, a bank account is to be opened in the name of the IMC Society in a conveniently located Public Sector bank having CBS or RTGS facility so that the loan amount sanctioned to the IMC Society may be directly deposited in it.
    • State/UT Government has to take steps to delegate powers to the IMCs as mentioned in Para 4(c) of Section B of the Memorandum of Agreement.
    • The State/UT Government has to constitute a State Steering Committee (SSC) and setup a State Implementation Cell (SIC) for management, monitoring and evaluation of this scheme as provided in the Memorandum of Agreement.
    • The newly constituted/reconstituted IMCs, under the leadership of the Industry Partner, have to prepare an Institute Development Plan (IDP) and have to decide their target Key Performance Indicators (KPIs) for next five years as given in Annex-A of the Memorandum of Agreement. The IDPs shall contain details about how much money is to be kept as seed money in a corpus fund and how much is to be utilized for different components such as civil works, purchase of machinery/equipment and other miscellaneous activities. The year wise break up for these components is also required to be given. IDP should be prepared after careful consideration of the available resources and requirements of the ITI.
    • The IMCs have to send the IDPs to the State Steering Committee who will examine them in terms of their feasibility and overall requirement of the State. The target KPIs for next five years also have to be examined by the SSC. The target KPIs for each ITI are to be jointly signed by the IMC and the State Government in the format given in Annex-A of the Memorandum of Agreement and appended to the already signed Agreement. The approved IDPs and KPIs together will be forwarded to the DGE & T by the SSC for expeditious release of funds.
    • The IDPs and KPI targets are scrutinized and approved by the Central Government and the sanctioned loan amount released to the IMC Society directly.
    • The released amount is utilized by the IMCs for upgradation of their ITIs and the courses in the upgraded facilities are started from the academic session commencing next to the financial year in which the loan is released.
    • The utilization of funds and performance of the ITIs is monitored regularly as per the monitoring mechanism set out in the Memorandum of Agreement.

    Status of Upgradation of ITI through PPP Mode

    1 Country 1396
    2 State Target 250
    3 Actual Achievement 250

    Public Private Partnership

    Financial Target given by Central Govt.

    S.No Year No. of ITIs Fund Released(Cr.) Expenditure upto June 2016(Cr.)
    1 2007-2008 62 155 80.35
    2 2008-2009 55 137.5 54.03
    3 2009-2010 60 150 25.76
    4 2010-2011 29 72.5 5.82
    5 2011-2012 44 110 5.37
    TOTAL 250 625 171.6


    Up-gradation of Trades and Started New Trades/Units as per Local Industry Demand : 735 Units.

    Increase in Intake Capacity : 14302 seats.

    Important Documents



    Government Regulations

    ITIs Covered

    Sucess Stories