Today India has only 2 lakh formal apprentices because of the outdated and restrictive provisions of the Apprenticeship Act 1961. Germany has 6 lakh and Japan has 11 lakh. But things were not always like this; Indian history has many examples of how statecraft was learnt by a prince serving an apprenticeship with a guru. Our language is peppered with terms like ustaad, mureed, gurukul, shishya, etc that arise from a rich tradition of experiential and apprenticeship learning. Professions like doctors, chartered accountants and lawyers have mandatory apprenticeships. Research shows that apprenticeships account for 70% of competence development in many countries. So, why is the powerful train of apprenticeships for skill development still stuck at the station in India?

I will argue that is because of the irrational and dated provisions of the Apprenticeship Act that was crafted for a very different India, labour market and business environment. Our formal education and training system is not producing ?work ready? youth.

An explosion of apprenticeships in formal sector employment has many upsides. They give youth the financial flexibility to learn while they earn. They are designed to teach by example and learn by doing. They are the most effective (and possibly only) way to transfer ?tribal? knowledge. They act as a portal to the organised sector for the unorganised workforce as a high percentage convert to full time jobs. Most fundamentally, apprenticeships lubricate India?s five labour markets transitions (farm to non-farm, rural to urban, unorganised to organised, school to work and subsistence self-employment to decent wage employment)

Today?s problems start with a regulatory framework that is fractured between the Directorate General of Employment and Training (DGET) of the ministry of labour, the ministry of human resource development and State Apprenticeship advisers. The partition between a graduate and trade apprenticeship is artificial and exists only in the cerebral cortex of regulators.

As with most labour laws in India, the bigger problems lie in the details. The act needlessly specifies stipend levels (that are outdated and low). Its static list of 254 industries and 127 trades does not include many new businesses or functions. Its minimum period of one year encourages high drop out rates and represents a high commitment hurdle for employers. It requires a case-by-case licensing procedures that is time consuming, does not provide for state wide or national licensing by employers and is opaque. The provisions for termination of an apprenticeship by the employer under circumstances of attendance, attitude and willingness are vague. It places restrictions on where apprentices can be located and prescribes low and random ratios for the number of apprentices an employer can hire.

The opponents to reform of the apprenticeship regime make valid points but there are solutions. Some say it will be used to exploit youth because stipends are very low; many employers are willing to come forward and say they will pay minimum wages. Some say it is a waste of government funds; many employers are willing to forgoe government reimbursement in return for unencumbered permissions. Some say the government can restrict apprenticeships to people below thirty years of age. Clever design on policy could create the outcomes we want though there may be villains and accidents. But drunk driving is not an argument against cars.

Some progressive states have realised the power of apprenticeships and are acting swiftly. Rajasthan just introduced an Ekalavya programme for backward youth, which incentivises employers to take on youth for 90 days by subsidising their stipend and paying the youth a low but sufficient daily living allowance. Critics say this is a misallocation and waste of government money but isn?t this better than a 90 day job under NREGA? If not anything, it puts youth into a corridor for permanent jobs with the improved employability that comes from experience.

The author is chairman, Teamlease Services