Context

In the US, Trump has set up a Task Force on Apprenticeship Expansion 2017 that calls for U.S. education providers and employers to learn from the successes of the German apprenticeship model. It “helped lower unemployment rates and contributed to the country’s economic success.”

Indian Apprentice system

1. In 1961, the Apprentices Act was brought in and it was made applicable to engineering, non–engineering, technology, and vocational courses.

• It constituted apprenticeship councils and advisors and placed a statutory obligation on employers to engage apprentices with a stipend in the ratio prescribed for respective trades. 

• It also imposed a penalty of six months of imprisonment or a fine or both on the employer in case of non–compliance. 

Transitions in the labour force

1. The composition of the workforce changed. Employment in the primary sector reduced from 76% to 46%, while increasing in the secondary sector from 11% to 23% and in the tertiary sector from 13% to 31%.

2. The 1991 economic reforms brought in a golden age for the private sector. The number of companies increased from 0.2 million in 1991 to nearly 0.9 million in 2014, with estimated employment of 30 million.

3. MSMEs grew exponentially from ten million enterprises in 2003 to 46 million in 2014 with estimated employment of 106 million.

Challenges in apprenticeship

1. Apprenticeships have stagnated between 2000-2014 due to the challenges created by the 1961 Act and stood at 0.28 million in 2014. 

2. Complex procedures for engaging of apprentices by companies led to MSMEs abstaining from participating.

3. The Act gave power to the bureaucracy to impose strict and burdensome compliance norms on companies. 

4. The threat of a penalty reduced partnerships between the private sector and the Government. 

5. Even for the apprentices, the stipend offered and progression opportunities are limited.

6. Improper dissemination of the benefits of apprenticeships led to training being perceived as less aspirational than a general education. 

The new model of apprenticeships

1. The amendment of the Act in 2014, followed by the introduction of the National Apprenticeship Promotion Scheme (NAPS) in 2016 changed the landscape a little.

2. The Central Apprenticeship Council also carried out reforms in 2019 to expand apprenticeship opportunities. 

3. Today, apprenticeship is a valid pathway for youth educated beyond grade five to acquire a skill. 

4. Their base stipend has been increased to ensure sustenance during an apprenticeship. 

5. Technology has rendered contractual paperwork and process seamless and minimal.

6. The amendments also have IT platform as an interface between stakeholders and apprentices for compliance and monitoring purposes.

7. Opportunities in the service sector have been opened to the youth by making apprenticeships obligatory for this sector.

8. A percentage band of 2.5% to 15% was given within which employers can decide the number of apprentices based on their needs and capacity. 

9. Opportunities have been opened for the SME sector also. Units having four or more employees are now eligible to keep apprentices either on their own or as a group of employers. 

10. Employers are empowered to decide their own curricula and the duration of apprenticeships on a need-basis. 

11. NAPS further incentivises employers by partially splitting the stipend burden between them and the government.

12. Third-Party Aggregators (TPAs) are empowered to help aggregate demand in clusters, pool resources, mobilise potential apprentices, deliver basic training, facilitate the paperwork and educate stakeholders on the need for apprenticeships.

13. Regulatory powers have also been delegated to the industry-led Sector Skill Councils (SSCs) to administer apprenticeships in their respective sectors.

These reforms have changed the industry from being over-regulated to being extremely open and with an emphasis on self-regulation and voluntary apprenticeships.

Results

1. More than 1.1 million candidates and 70,000 companies are now registered on the apprenticeship portal.

2. Annual apprenticeships have increased by 60%.

Challenges remaining

Awareness, lack of a progression pathway, absence of an integrated credit framework, the poor value proposition for certifications, training capacity shortages

Way ahead

1. Government and industry stakeholders/SSCs need to jointly promote apprenticeships as a powerful learning tool. 

2. MSMEs should leverage TPAs to create tailored apprenticeships. 

3. The employer must create a learning experience during the apprenticeship. 

4. The challenges of the new system need to be conveyed to the government periodically.

Conclusion

The time has come for India to have its own “Celebrity Employers” and model of apprenticeship – dynamic, flexible, futuristic, inclusive, convenient, self-regulated and rooted in Indian socio-cultural and economic realities.