1. Let industry embrace apprenticeship reforms

Let industry embrace apprenticeship reforms

If driven well, apprenticeship can become the most powerful vehicle under the Skill India Mission umbrella

Published: October 26, 2015 12:03 AM

Rejuvenating India’s outmoded apprenticeship regime is one bright idea whose time has come. The Apprentices Act was first conceptualised in 1961 when the infant Indian industry was largely manufacturing-based under a licence-quota regime, along with an insignificant services sector. In the initial couple of decades after Independence, our industry perhaps lacked adequate maturity and, hence, a prescriptive regime for notification of apprenticeship quota and strict controls may have been necessary.

More than five decades have elapsed, with sweeping changes having taken place in the Indian industry. Despite a significant growth in the manufacturing sector, emergence of an even larger services sector, and the introduction of a large number of vocational and other relevant courses beyond ITIs, we only have less than 3 lakh apprentices currently in India. This is a very small proportion of over a crore people annually joining our labour-force of 48 crore workers. As against that, countries such as Germany, Japan and China have 3, 10 and 20 million apprentices, respectively. Clearly, the scale of apprenticeship in India has been abysmal.

Industry has been pleading for an apprenticeship regime that is business-friendly with reduced governmental controls. The Confederation of Indian Industry (CII) led the process of countrywide consultation with the industry to understand their pain areas associated with apprenticeship. This eventually led to the emergence of a consensus that a self-regulated regime would lead to a sharp increase in the number of apprentices voluntarily trained by the industry. Reforms propelled by the National Skill Development Agency (NSDA) and CII, coupled with a long-drawn advocacy process and inter-ministerial consultations, eventually resulted into amendments in the Apprenticeship Act passed by both Houses of Parliament a few months ago.

As the most significant change, the outdated system of trade-wise and unit-wise regulation of apprentices under a prescriptive regime has been dismantled and substituted with a minimum target equivalent to 2.5% of employees. To dispel the allegation that apprentices may be used as cheap labour, the maximum permissible number of apprentices would be 10% of employee strength. Deployment of apprentices in the services sector has also been made compulsory now.

To bring respect and dignity to apprentices and make them cover their basic necessities, the stipend payable has been directly linked to minimum wages at the state level. The revised stipend would be 70% of the minimum wages in the first year, followed by 80% and 90% in the second and third years, respectively. Industry should be free to pay higher stipend to apprentices. The Apprentice Protsahan Yojana has also been started, wherein 50% of the prescribed stipend payment would be made by the ministry of skill development and entrepreneurship (MSDE), subject to certain conditions, with highest priority to MSMEs in the manufacturing sector.

Instead of being confined to 259 designated apprenticeship trades of the National Council for Vocational Training (NCVT), the industry has been allowed to onboard apprentices in optional trades also, based on the newer technologies and emergent business landscape. In addition, the scope of apprenticeship has been expanded to include all undergraduate, postgraduate and other approved vocational courses.

Penalties such as imprisonment and other liabilities have been removed and industry has been allowed to self-regulate and report its achievements vis-a-vis the targets. However, the faulting units would be subject to a token financial fine for non-compliance.

In-house infrastructure for basic training is no longer compulsory and companies are allowed to outsource basic training. To facilitate this, third-party agencies would be encouraged to undertake basic training wherever some companies, especially MSME units, do not have internal facilities to do so. Not only this, if an MSME unit does not have all the facilities to run the complete practical training in-house, it would be allowed to split such hands-on apprenticeship across two or three industrial units.

The duration of apprenticeship has also been rationalised and would now be six months (minimum) to three years (maximum), but there is a consensus to cap most of the long courses to two years. The inspection of apprenticeship matters by government authorities can only be done very selectively and after prior written approval of the respective State Apprenticeship Advisor or Regional Directorates of Apprenticeship Training (RDAT). The restriction on deployment of apprentices from outside the state has been removed and they are now allowed to seek apprenticeship in any unit anywhere in India.

To make things simpler for the industry as well as the youth, an apprenticeship portal was recently launched by the Prime Minister where all companies would be required to publish their trade-wise requirement of apprentices. Apprentices would be encouraged to apply online and apprenticeship contract approval would also be online. This would enable online interaction among apprenticeship applicants, companies and the government. Companies would publish apprenticeship details on this portal instead of submitting tedious returns and the government would get data directly from the portal.

The new apprenticeship rules have just been notified to complete the gaps in the reforms process which were not hard-coded in the amended Act. Curriculum of major apprenticeship courses accounting for 70% of the existing seats have been revised to make them more industry-relevant, competency-based and NSQF-compliant. The government and industry associations are working together to propagate these reforms to the industry so that the country experiences a quantitative and qualitative improvement in apprentices within the next couple of years.

Successive studies have proven that given the hands-on focus during apprenticeship, the industry directly benefits from enhanced skills, higher productivity and better professionalism once apprentices join the workforce. The payback period is rather short, which further strengthens industry’s business case for onboarding of apprentices. The government also benefits since among a large number of skilling schemes, the efficacy of apprenticeship system is invariably the highest. The youth, undoubtedly, are the biggest beneficiaries as it substantially improves their employability and market value as well as their capability to become self-employed. Apprenticeship in the post-reforms era, to use the cliched term, is essentially a win-win for all stakeholders. If driven well, apprenticeship can potentially become the most powerful vehicle under the overall umbrella of Skill India Mission launched by the Prime Minister.

By Jayant Krishna

The author is principal consultant, Tata Consultancy Services; lead, Task Force on Apprenticeship Reforms, CII; and chairperson, Special Task Force on Apprenticeship Rationalisation, Ministry of Skill Development and Entrepreneurship

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