As apprenticeship slowly but steadily is taking centre stage in the skill & education eco system, and is now an integral part of the new education policy, it offers a huge opportunity for us to integrate education with industry. To put it simply, apprenticeship is a formal on the job exposure to a student on the shop/office floor of a company (OJT). This helps her/him to be fully trained &ready to be employed. It is perhaps the only programme in the eco system where the two key stakeholders i.e, the youth and the industry have to mandatorily play the primary role-all others including the govt. become facilitators and herein lies its inert strength. However, till recently, unlike in some of the developed economies, apprenticeship in India had not really taken off despite the law mandating industry to engage apprentices since 1961. As against Germany where 4% workforce are apprentices, in India the number was (& still is),too miniscule to even be quoted. The main reason for this was that the industry found the Apprenticeship Act to be too prescriptive to meet its needs. But this is no more the case. Comprehensive amendments in the apprenticeship laws in 2014 & 2015 (& again in 2019), have made apprenticeship in India extremely industry friendly.Complete discretion has been given to a company to design its own courses.
As more and more companies are taking note, the impact of the reforms is beginning to be felt.A report recently released by DFID based on a study it got done by Dalberg, substantiates that the industry feels the programme is well crafted and works on ground. 67% employers surveyed in the report saw net positive value in apprenticeship; Lower recruitment costs, better long-term performance, and significant productivity gains were rated as the top 3 benefits by employers.The number of apprenticeship contracts crossed 4 lakhs in 2019-20 up by more than 50% from CFY 2018-19, (as compared to 17-18% year on year growth in the previous years). The number of contracts in the newly introduced Optional Trades window, (under which the industry can now design its own apprentcieship programme), actually grew more than 500% in the CFY 2019-20 as compared to CFY 2018-19 and the growth continues in the CFY 2020-21 despite COVID. The number of establishments signing up for apprentices has gone up from 5000 odd in 2015-16 to more than a lakh in January 2021. The number of apprentices enrolling have grown 113% between 2015-16 and 20-21.
As the govt. is considering another round of reforms what needs to be understood is that the trends show that apprenticeships in India over the past few years has actually been a success story rather than a non-starter and that the law in place even today is in no way a show stopper. That many things can be done to ramp up apprentcieship manifold even without waiting for further changes in law.
It is this understanding that will help focus on issues which are important and doable rather than putting its entire focus on amending law. These include (i) designing awareness campaigns among the industry and youth on the amended law & the usefulness of apprentcieship programmes, (ii) capacity building of state functionaries and other facilitators in the eco system including the Sector Skill Councils, Third Party aggregators, the colleges, (iii) implementation of apprentcieship embedded degree programmes on a large scale in colleges, (iv) linking school drop outs to jobs through apprentcieship programmes in community colleges and skills universities, (v) timely reimbursement of stipends under NAPS, (vi) ensuring efficient portal functionality which is the backbone of the programme and (vii) enforcement of law & monitoring to ensure quality.
The overall dialogue and communication around the program has been flawed. The program is generally referred to as National Apprenticeship Promotion Scheme, (NAPS), which is only a small financial incentive package associated with apprenticeship. While this can be a good starting point to get industry buy in, excessive focus on it or on the need to change law, keeps the Govt. & the companies from seeing the real benefit/potential ROI fromapprenticeships. The fact is that unless the industry comes forward and offers its shop floor/offices to the youth to train, there is no way that the industry is going to get youngsters who are employment ready. It is in this context that the apprenticeship law needs to be seen. Hence, the thought process that the companies need to be incentivized or laws need to be continuously amended to make it easier for companies to engage apprentices needs to change. It is due to thislack of understanding which makes most companies either focus on the financial incentive orthink of apprenticeship as a philanthropic/CSR activity rather than a programme which brings value to their business. As is the case with any product line of a company, the adoption rate will depend a lot on effective communication that clearly bring out the value proposition of apprenticeships per se.
After having got the law right, the govt. should keep all of this in mind and ensure that the essence of apprentcieship doesn’t gets diluted, in pursuit of meaningless numbers. Some suggestions under consideration include the proposal to equate apprentcieship to internship and to make apprentcieship stipend free for degree students. All of this may seem convenient to ramp up numbers, but then not everything convenient is good. Internship is at an arm’s length engagement and has not served much purpose in the past, (except in the case of Articleship or in the Health sector where it is a formal arrangement under a Regulation/Act and where stipend is paid to the intern). Loose stipend free internships will be paying lip service rather than resolving the core issue which is to ensure that our students become employable through a well-designed apprenticeship programme, and the industry gets skilled manpower as per its requirement. Moreover, stipend free internshipsto degree students will put the drop outs, who can use the apprenticeship bridge to become employable, at a distinct disadvantage since while the industry will be required to pay stipend to such apprentices, it will be able to engage graduate apprenticesfree of cost.
Yes, there is no doubt that there is still a long way to go for apprentcieship to become a way of life in India. The growth till now has almost entirely been driven by the larger companies which fall under the Central Govt’s jurisdiction. The smaller companies under state jurisdiction, which form the bulk of the industry are yet to understand the amendments. As per 6th Economic census data available with the Labour Bureau, Ministry of Labour on India’s workforce, there are 26,30,000 MSMEs in the country with 5 or more workers with 850 lakh employees. If these establishment engages even one apprentice each, the MSME sector alone can generate 26 lakh apprentices. And, in case these companies engage up to 15% of its employee strength as apprentices as is allowed under law, the number of apprenticeship contracts at any given point of time in India can exceed 12 million. This is the kind of potential apprenticeship has in India.
Rather than getting overwhelmed, the Govt., should see this as a huge opportunity and focus on implementation rather than on legislation given the healthy trends over the last few years.This growth is bound to be even sharper once narrative is set right, the state capacity built and the smaller companies join in. The larger companies too, are expected to play a significant role in pushing their ancillaries and franchisees to adopt apprenticeship after having seen its benefits.
The importance ofapprentcieship in the context ofour young nation cannot be over-emphasised. It is thecritical bridge which links education/skill and the industry, and provides the platform where “Young India” can get exposed to the shop floor (or processes in case of the service sector), and get ready to be employed in India or all across the world making India the global skill capital.
Surajit Roy
Former Head (Apprentcieship)
NSDC
