Apprenticeship reloaded: Move afoot to make system flexible to address job generation

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The word apprentice is reminiscent of the controlled economy. The word conjures up images of young graduates from vocational courses picking up the basics of a profession on a shopfloor of a public sector undertaking. In an era when joblessness is becoming a challenge for policymakers, the government seems to be preparing for a new push to the practice of apprenticeships.

Apprenticeship is one of the time-tested methods to impart training to freshers. While some companies employ the better talents in their rolls, those who receive training also have better employment prospects in the job market.

Freshers who are looking for jobs after completion of their education will be benefitted.

Under the National Apprenticeship Programme (NAP) launched in August 2015, the Centre provides financial support to firms who employ apprentices.

According to NAP, the government reimburses 25% of the prescribed stipend paid to apprentices subject to a ceiling of Rs 1,500 per month per apprentice.

14 years and above

The following people can undergo apprenticeship training:

— Any individual who has completed 14 years of age.

— For hazardous industries the minimum age is 18.

— He/she has to be physically fit for the course.

— The candidate must have minimum educational qualification prescribed for a trade.

ITI pass-outs, graduates/diploma holders, all pass outs from the National Skills Qualifications Framework aligned courses including Pradhan Mantri Kaushal Vikas Yojana/Deen Dayal Upadhyay Grameen Kaushalaya Yojana, graduation/diploma students are all covered under the apprenticeship programme.

Government funds

The government also reimburses the cost of basic training up to a limit of Rs 7,500 for a maximum of 500 hours) to basic training providers in respect of apprentices who come directly for apprenticeship training without any formal training.

The medium and small scale sector that is the largest component of the manufacturing sector of the country is ideal for absorption of apprentices.

Job generation challenge

The Union government is preparing to amend the Apprenticeship Act in the impending monsoon session of the Parliament. The motive is to prompt more and more companies to hire apprentices by broadening the scope and flexibility of the legislation.

Thanks to the second wave of the pandemic, as many as 2.53 crore jobs were lost between February and May this year, Centre for Monitoring Indian Economy (CMIE) estimated.

In February as many as 25 lakh jobs were lost. One lakh jobs were lost in March, 74 lakh in April and 153 lakh in May, taking the total loss in employment in the four months to 2.53 crore.

Government plan

The Ministry of Skill Development and Entrepreneurship that administers the apprenticeship programme has kicked off inter-ministerial discussions on the necessary changes in the Apprentice Act.

After the consultations between ministries, it would be put up for approval of the cabinet. Once the Union cabinet approves it, the Bill would be put to the Parliament for its nod.

The aim

Small industries, especially in the manufacturing sector, operate in a cluster. The amendment is supposed to facilitate small and micro companies that function in a cluster to hire apprentices jointly and deploy them on a sharing basis.

Now, there is no cluster approach to enrolling apprentices. The amendment may pave the path for similar companies taking apprentices jointly and sharing them for mutual benefit. They can also share the stipend that will reduce the financial burden on the firms. They can be deployed according to their requirements.

It might also, in a way, reduce the wage bill of the companies since one of the objectives is to allow employers to fill as much as 15% of their workforce with apprentices.

There would also be flexibility to shift apprentices around locations and shopfloors and even at the site of vendor companies.

Rs 3,000 crore allocation

The Union Budget has allocated Rs 3,000 crore for boosting the practice of apprenticeship.

|“In 2016, we had launched the National Apprenticeship Promotion Scheme. The government proposes to amend the Apprenticeship Act with a view to further enhancing apprenticeship opportunities for our youth,” Union Finance minister Nirmala Sitharaman had said.

Deployment abroad?

According to reports, the legislation might allow companies to deploy apprentices in operations in a foreign land. They could also use the services of staffing firms to scale up apprenticeship training and hiring.

The new amendments might also reduce penalty clauses if some firms fail to hire the promised numbers.

According to industry sources, sectors such as healthcare, pharmaceuticals, IT-enabled services, banking and financial services, and e-commerce have increasingly gone for hiring apprentices.

About 40% of the apprentices are being absorbed by the companies where they receive their training.