The Narendra Modi government on Saturday substantially increased its fund allocations for skill trainings and livelihood programmes in the Union Budget 2025-26 as part of its ambitious target of having 100% skilled labour with meaningful employment in the country.
Finance minister Nirmala Sitharaman’s eighth budget focussed on employment generation and skill development as key areas — themes that also dominated her previous budgets.The minister announced a slew of schemes to boost employment; as a consequence, the skill development ministry’s annual budget, particularly the revenue expenses of its skill programmes, saw a manifold rise.
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The main allocation was made on upgrading ITIs or Industrial Training Institutes that started in the 1950s to give vocational training to young people and help create a skilled workforce.
From a mere ₹294 crore in the revised estimates of FY25, the “new ITI upgradation” programme was allocated ₹3,000 crore in the 2025 budget, signalling the government’s urgency to impart skill education to a large section of the young population and reap the dividend of India’s youth power.
Sitharaman also announced five National Centres of Excellence. “Building on the initiative announced in the July 2024 Budget, five National Centres of Excellence for skilling will be set up with global expertise and partnerships to equip our youth with the skills required for “Make for India, Make for the World” manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews,” she said.
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In sync with Sitharaman’s speech, the revenue expense of the centrally sponsored schemes of the skill development ministry got an allocation of ₹3,050 crore in FY26 as against ₹669 crore in the revised estimates of FY25.
The overall budget of the skill ministry also gone up from ₹3,241 crore in the RE of FY25 to ₹6,017 crore in the FY26.
The skill programme, spread across several ministries, aims to cover both the rural and urban India.
Sitharaman announced a comprehensive multi-sectoral rural prosperity and resilience programme that will be launched in partnership with states. “This will address underemployment in agriculture through skilling, investment, technology, and invigorating the rural economy. The goal is to generate ample opportunities in rural areas so that migration is an option, but not a necessity,” the finance minister said.
A few other labour-intensive schemes got a boost in the budget.
The Footwear, Leather and Accessories Development Programme in the leather industry saw a budget allocation of ₹350 crore for FY26 as against the RE of ₹316 crore in FY25.
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The new internship programme, which was announced in the previous budget and is under the corporate affairs ministry, received a substantial hike in fund allocation — Rs. 10831 crore as against the RE of ₹380 crore in FY25.
Announced in the 2024 Budget, the Prime Minister’s Internship Scheme (PMIS Scheme) aimed to provide internship opportunities to 10 million young people in the top 500 companies in five years. As an initiation to this scheme, a pilot project targeted at providing 125,000 internships was launched on October 3, 2024.
The top 500 companies were identified by the ministry based on their average corporate social responsibility expenditure of the last three years. Under PMIS, the Centre has committed to offering each intern a monthly allowance of ₹5,000 for 12 months, along with a one-time aid of ₹6,000.
One of the top livelihood programmes for rural India, the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM), got an allocation of ₹19,000 crore as against RE of ₹15,047 crore in FY25.
