By Rituparna Chakraborty
Freshers have practically no takers in India. 58% of our graduates are underemployed earning less than Rs 6000 a month. Our Gross Enrollment is abysmally low at 27%. And, heartbreakingly, there is no correlation found in India between the grandeur and size of the buildings of our education institutions and the return on investment for students by way of decent livelihood. The missing link between these seemingly disjointed facts is a segway towards converging education towards livelihood of dignity. The solution is obvious – massification and innovation around an industry led apprenticeship regime. Before we jump to “how”, we must remind ourselves India is one of the youngest nations in the world with over 52% of the population below the age of 25 and over 65% below the age of 35. Soon, India will become the most populous country in the world overtaking China. India is overtaking China’s 1,425mn population with a marginally lower 1,412mn this year. With a rising population, India needs to utilise the potentials of its vast human resources by empowering with the right skills to fuel an already rapidly growing and dynamic economy. For the context of the case I make today, especially in the MSMEs, manufacturing powerhouse and start-ups.
India is the home of 7.9mn MSMEs bagging 7.5mn micro enterprises, 0.3mn small and around 35k are medium enterprises, is contributing significantly in the development of the country by fostering entrepreneurship and generating employment opportunities at comparatively lower capital cost. An overall view of enterprises in terms of share represents 31% in the manufacturing category, 36% in trade and 33% in other services. The tremendous chain of the MSMEs has been creating 111mn jobs especially in the trade category contributing 35% and manufacturing 32%. Alongside, country has 75,000 start-ups and has become the third-largest startup ecosystem in the world after the US and China. An impressive, 0.7million jobs have been created by the indian startups. Interestingly, 49% of startups are from tier 2 and 3 is a validation of the tremendous potential of our country’s youth. When it comes to apprentices, India has 0.5 million apprentices comprising only 0.11% in an overall workforce compared to other countries, China has 20 million, Japan 10 million, UK with 0.7 million. Keeping in view of the larger ecosystem of MSMEs and start-ups of the country, this is miniscule compared to nearly 10 million youth that enter the workforce every year.
Notwithstanding the reforms introduced by amendments in the apprenticeship act, 1961, certain challenges continue to deter MSME & New Startup employers from engaging apprentices. There is a deep aspirational bias toward academics over skill training accompanied by the pervasive view that students should finish their academic pursuits and then enter the labour market in white collar jobs. Additionally, the structure for rolling out education especially in the higher education segment, on-the-job training through degree-linked apprenticeships is missing in the ecosystem dispute the renewed importance highlighted in the NEP. The highly complicated governance architecture of the apprenticeship program and regulatory changes in the rules and acts by multiple departments are generating a great deal of ambiguity among the stakeholders. There is also a great deal of confusion about apprenticeship schemes as many of the schemes are offered by multiple departments and states. To successfully impart training in addition to work, employers have to have an appropriate infrastructure in place.
A growing employment crisis has re-focused attention on the importance of cultivating employability by bringing on-the-job training and learning. At the same time, the employability of India’s youth is 45% primarily due to the shortage of relevant skills. The above scenario clearly depicts that India is not having a job problem, there is a relevant skill problem. The classic remedy for addressing the issues of talent shortage and skills gap is apprentices. If each MSMEs and start-ups engage a small portion of apprentices, both sectors have the potential to generate a huge amount of apprentices. The MSME sector especially the establishments with more than 30 employees and engaging 2.5% of apprentices of their total manpower alone has the potential to generate over 2.5mn apprentices. If MSMEs and start-ups have 10% of their workforce as apprentices, there would be a trained workforce of about 9mn youth and hiring 15% would generate a 13.5mn industry-ready workforce. In a way apprenticeships offer a way to connect education, skills and employment, enable employees and employees to find the best match and employability signaling value for youth in the job market.
The author is co-founder, executive director, TeamLease Services Limited. Views are personal.