ITI grading system’s attention on ‘youth readiness, employability’ low; FICCI, FRSN suggest different model

Skill Development and ITIs: The Data-Driven Grading Methodology (DDGM) for Industrial Training Institutes (ITIs) implemented at present just measures “inputs” and “outputs” such as enrolment, pass rates and infrastructure, with insufficient attention to “youth readiness”, “employability” or the “institutional conditions”, states a report published on the state of ITIs in India.

The report also highlights the need for operational autonomy, responsive financing, localised governance, and policy coherence for ITIs.

The report titled The State of ITIs in India: A Grading Framework for Readiness and Reform suggests a new framework of “linking grading results with capacity-building programmes, formal recognition, and funding eligibility, to motivate states and ITIs to invest in institutional development”.

The report has been published by The Federation of Indian Chambers of Commerce and Industry (FICCI) and the Future Right Skills Network (FRSN). The Future Right Skills Network (FRSN) is a collaborative platform launched in 2019 by Quest Alliance, with support from Accenture, Cisco, JPMorganChase, LinkedIn, and SAP Labs India.

ITIs have been the backbone of vocational education and training in India since the 1950s, operating under state governments. At present, there are 15,034 ITIs of which 3,298 are government and 11,736, private. More than 300 are exclusively for women.

Grading Industrial Training Institutes: Limitations

The first phase of ITI grading was launched by the ministry of skill development and entrepreneurship (MSDE) in 2017 and the second phase was conducted in 2019. This earlier system involved field visits and data validation by an external agency.

The grading system was reformed in 2023 and now includes eight parameters. These are

• Admission percentage

• Female participation

• Trade diversity (availability of new and emerging and non-engineering trades)

• Pass percentage

• Computer Based Test participation

• Average marks percentage of all trainees who appeared in CBT exam

• DST enrolled trainees against total admitted trainees

• SC/ST/PwD enrolled trainees against total admitted.

In the 2025-26 academic year, 14,490 ITIs were graded and 90 were non-graded. The results show that around 4,082 ITIs out of the total have a score of 8 and above.

The report adds, “The DDGM represented an important step toward improving accountability and benchmarking quality within ITIs. However, the DDGM — currently limited to a set of indicators related to enrolment, pass rates, and infrastructure — measures inputs and outputs, with insufficient attention to youth readiness, employability, or the institutional conditions that shape these outcomes.”

It further adds, “The reduction in the scope and number of parameters assessed diminishes the framework’s ability to guide transformative, outcome-oriented reforms.”

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Need for ITI autonomy

Highlighting the other issues with ITIs, the report stresses on the need to “create an enabling environment that grants ITIs the autonomy, agency, and operational flexibility” to respond to fast-changing labour market demands.

It also states that on one hand the centralisation and standardisation of the ITI ecosystem can bring benefits like consistency and scale to the ITIs ecosystem, but highlights the limitation as well.

“It can also limit the ability of ITIs to recruit and retain qualified faculty, revise or contextualise curricula, partner flexibly with industry, or invest in infrastructure based on real-time needs. Multiple research studies highlight the lack of leadership in ITIs. Where such institutional leaders are available, they tend to function as administrative managers rather than as strategic visionaries capable of shaping the skilling responses to meet local and wider needs of industry,” states the report.

High centralisation also prohibits and limits the leadership of “decision making authority, agency and budgetary discretion”.

Citing other published reports, the report also lists other challenges with ITIs like low levels of formal vocational training, limited industry linkages, outdated infrastructure, and shortages in qualified faculty.

“Multiple employers noted a gap between curriculum content and actual delivery. The curriculum may be modern on paper—CNG, robotics, EV— but we don’t see these skills in candidates,” a recruiter told the authors of the report as part of wider industry consultations.

Respondents from industry also said that the high-end trades should be mapped to clusters where industry exists, while in rural areas, alignment with local demand is key.

“The framework should therefore evaluate the local industry catchment and job availability, learner mobility, preferences and curriculum–job alignment by geography,” the report says.

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Suggested ITI grading framework

FICCI and the Future Right Skills Network have suggested an alternative framework for grading ITIs.

“The grading framework is designed to incentivise improvement and foster innovation. We propose linking grading results with capacity-building programs, formal recognition, and funding eligibility, to motivate states and ITIs to invest in institutional development,” states the report.

The suggested framework involves assessing ITIs on three broad parameters:

• Youth readiness and skills

• ITI-industry engagement

• Institutional functioning

The first will assess the extent to which ITIs are equipping learners with technical and other skills required to secure and keep jobs and also expand work opportunities. “It emphasises learning outcomes over content delivery, with a focus on real-world readiness,” says the report.

The ITI-industry engagement part will assess the number of partnerships for curriculum co-design, guest faculty, short-term programmes, faculty training, internships, on-the-job training, and placements .

The others include “ITI’s responsiveness to emerging sectors such as green energy, automation, and digital manufacturing” as well as “innovations in engagement models, including remote collaboration and regional cluster-based partnerships”.

Institutional functioning would look into

• Faculty availability and qualifications

• Infrastructure adequacy and utilisation, as per the National Skill Qualifications Framework (NSQF) norms

• Inclusive enrolment and learner diversity

• Financial management and fund utilisation

• Governance and leadership

• Innovations and context-driven solutions.

These details would be collected through a combination of quantitative and qualitative methods, such as integrating data from Management Information Systems (MIS), learner assessments, self-reports and surveys with alumni and employers.

It suggests phase-wise implementation of the framework.

“ITIs with seat utilisation in the range of 60–70% may be prioritised, as these are likely to reflect both demand and scope for improvement — offering fertile ground for targeted support and scale-up,” the report states.

It adds that the framework suggested is not intended to public rankings of individual ITIs.

“It is a system-learning tool—one that fosters continuous improvement, surfaces actionable insights, and enables targeted reform. The framework establishes a credible foundation for long-term system strengthening,” says the report. The insights are intended to aid policy making by helping the Directorate General of Training (DGT) prioritise for reforms, resource allocation and skill missions as well as help peer learning within the system and across regions.

The suggested framework and industry feedback must be placed against the background of the government’s ITI Upgrade Scheme. In the 2024-25 budget, the government had announced a national scheme for upgrading 1,000 ITIs in a hub-and-spoke arrangement, over five years.