New Delhi: The Union Budget 2026-27, presented by the Finance Minister, has sharply increased funding for the Ministry of Skill Development and Entrepreneurship (MSDE), underscoring the government’s emphasis on workforce readiness, employability and industry-aligned vocational training. Under the new budget, MSDE’s allocation for FY 2026-27 has been raised to Rs 9,885.80 crore, a near fourfold increase over the Rs 2,703.54 crore revised estimate for the previous year and significantly above the Rs 6,100 crore allocation in Budget Estimates for 2025-26. This substantial rise reflects a strategic shift towards skilling as a driver for economic growth and job creation.
PM SETU and ITI Upgradation Take Centre Stage
A key beneficiary of the enhanced skilling budget is the Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs (PM SETU) scheme. More than 60 per cent of the ministry’s total outlay — roughly Rs 6,140.50 crore — has been earmarked for this flagship initiative. PM SETU aims to modernise Industrial Training Institutes (ITIs) across the country by upgrading infrastructure, aligning vocational curricula with labour market requirements, and strengthening placement support. This approach is designed to bridge the gap between training and industry needs, especially for sectors that demand a skilled workforce. Officials describe the allocation increase as “Yuva Shakti-driven,” aligning with long-term goals of Viksit Bharat 2047 by positioning skills development at the core of national human capital strategy.
Broader Skill Development Strategy
Beyond ITI upgrades, the budget also expands support for NSQF-aligned skill programmes, caregiver and allied health training, and sector-specific skilling in textiles, tourism and services sectors. These initiatives are expected to strengthen vocational training pathways and create a more employment-ready workforce, particularly in Tier-II and Tier-III cities. The strategy reflects a shift from generic training targets to a more employment-linked and sector-focused skilling ecosystem, capitalising on partnerships with industry and states to deliver job-oriented outcomes.
Implications for Students and Job Seekers
For students and job aspirants, the expanded skilling budget signals greater opportunities for structured training, access to improved facilities, and broader alignment with industry needs. By strengthening the link between education and employment, the government aims to equip India’s youth with relevant skills that enhance their competitiveness in a rapidly evolving job market. With higher allocations and targeted programmes like PM SETU, the Budget 2026-27 underscores the centrality of skill development in India’s economic transformation agenda.