Apprenticeship in India-The way forward in the post COVID scenario

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Surajit Roy was till recently heading the Apprenticeship Division at the National Skill Development Corporation (NSDC). He is the harbinger of Apprenticeship in its present form in India. While at the NSDC, he also headed the Education, Sector Skill Council Governance, RPL, and Special Projects verticals. He is a student of Mayo College, Ajmer and a Postgraduate in Social Sciences from St Stephens College Delhi. Having work experience of more than 35 years, he has served both in the govt and the private sector. He is a formal Civil Servant and served the Delhi Govt, and the Andaman & Nicobar Islands Administration for nearly 25 years. He was instrumental in bringing to Delhi almost all the high-end Retail spaces, including the Saket and Vasant Kunj Malls while serving in the Delhi Development Authority. He opted for a Voluntary Retirement in 2007 to join the corporate world. He headed the DLF Homes East & Central India operations and then joined the Ansal API to look after its Rajasthan operations and the Ansal Institute of Technology & Sushant School of Architecture, Gurugram. He returned to the social sector to take the Skill Development & Waste Management initiatives of CREDAI, (Confederation of Real Estate Developers Association of India), before joining NSDC.

Conceptually Apprenticeship has always been considered as one of the best bridges to connect the entire education/skill ecosystem (along-with colleges/training institutions) and students looking for employment, with industry looking for shop floor exposed job ready skilled manpower. To put it simply, apprenticeship is a formal OJT exposure on the shop/office floor in any manufacturing or service industry for a student who is educated/skilled based on a contract between a potential employer and an apprentice, (student). This exposure helps a student to round off as a skilled workforce fully ready for employment; and the student earns an apprentice stipend while learning. Unlike in some of the developed economies in Europe, apprenticeship in India had not really taken off despite the law mandating industry to engage apprentices on its shop floors since 1961. As against Germany where 4% workforce are apprentices, in India the number is too miniscule to even be quoted.

The main reason for this is that in India, the industry always found the provisions of the Act to be too prescriptive to be able to meet the needs of the industry. But over the past two years we notice a change in the trend as apprenticeship seems to be at last picking up. And it could just be one of the major reforms the Govt. could pursue even in the post COVID scenario as in the background of mass scale absenteeism, companies are looking to substitute workforce and this substitution can be done better by using the apprenticeship connector to get a more rounded skilled workforce. The programme is ready to run on its own steam; provided having done its basics right, the Govt. does not go wrong from here in pursuit for numbers.  

Also Read: Apprenticeship and Education – The way forward

The main reason why apprenticeship has picked up in India are the comprehensive amendments in the apprenticeship laws made by the Govt. as a part of its first set of reforms in 2014/15, and again in September 2019, which has made it extremely industry friendly. What is most significant change is that complete discretion has been given to a company to design its own apprenticeship courses and run the programme in ways which suits it to meet its requirements for skilled human resources. A company is now no more bound to run apprenticeship only in job roles notified by the govt under the “Designated Trades” umbrella administered by the Director General of Training (DGT) or the Board of Apprenticeship Training (BOAT). It now has the liberty to run its own programme under the “Optional Trades” umbrella. (Optional Trade simply means those job roles, different from the ones notified by the Govt., on which the industry has opted to run its apprenticeship programme). Further apprenticeship is no longer restricted to the manufacturing sector. The law mandates all companies the service sector included, having more than 30 employees to engage apprentices @2.5% of its workforce every year, and pay a minimum prescribed stipend to them. Similarly, on the supply side, it no longer limits an apprentice to be only from the engineering back ground. Just anyone who has done classes beyond the 5th standard can be engaged as an apprentice by a company; the entire discretion as to what kind of educational qualification is required for which job role is left to the industry to decide. To top all of this, the Govt. in 2016 introduced the National Apprenticeship Promotion Scheme (NAPS), to partly reimburse the cost of the stipend to the industry which is processed on line through the apprenticeship portal. In fact, it is interesting to note that the portal finds its way under the definitions in the Act itself. The entire programme is to be run on this portal-an exceptionally forward looking arrangement as there is no requirement by industry to move paper or people. And this portal is up and running housed at the National Skill Development Corporation (NSDC).

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The impact of these reforms is beginning to be felt. As more and more companies are taking note of this, the number of apprenticeship contracts crossed 3 lakhs in 2019-20 up by 50% from CFY 2018-19, (as compared to 17-18% year on year growth in the previous years); the number of contracts falling under the “optional trades” window saw a 6 times growth to touch nearly 1 lakh which is a whopping 500% growth! In less than 2 years of focused implementation the Optional Trade contracts is now one third of the total apprenticeship contracts in India. Seen against the background that the Apprenticeship Act has been there in India for 60 years now, this is a phenomenal growth by all standards.

Also Read: Upskilling our nations young workforce

And all of this happened without the states having contributed much as even today only a few of them have focused on the Optional Trades window; the growth has essentially been driven by the larger companies who fall under the Central Govt’s jurisdiction; the smaller companies under state jurisdiction are yet to understand the amendments and hence have not yet taken to the programme. Hence the growth is bound to be even sharper once the Govt. capacity builds the states; the larger companies too are expected to play a role in pushing their ancillaries and franchisees to adopt to apprenticeship as they see the benefits of the programme for themselves. 

A report recently released by DFID through Dalberg, perhaps the first after the changes in the apprenticeship laws, substantiates that the industry feels the programme is well crafted and works on ground. 67% employers surveyed in the report saw net value in apprenticeship; Lower recruitment costs, better long-term performance, and significant productivity gains were rated as the top 3 benefits by employers; 

Construction staff characters design. Include foreman, painter, electrician, landscaper, carpenter. Professionals team.

Yet there is a long way to go. As per data from the 6th Economic census available with the Labour Bureau, Ministry of Labour on India’s workforce, there are 60 lakh companies in the country with a total workforce of 550 lakh employees which can engage apprentices under law. Going by these numbers, India can have as many as 22 lakh apprenticeship contracts in a year to be at par with Germany considered the global leader on apprenticeship, where apprentices constitute 4% of its workforce. And herein lies the opportunity and the peril. 

The opportunity is to understand that at last something which efficiently connects the supply of educated & skilled youth to the demand of industry is working on ground. The Govt. needs to therefore keep up the momentum with continuous improvements based on feedback. Given the value proposition inbuilt in the programme itself, the government could consider repositioning apprenticeship by moving away from an ‘incentive driven’ to a ‘value-based’ proposition; and this is very relevant in the context of a post COVID scenario. Depending on the resources available with the Govt., the benefits of NAPS could be limited to a period of one year only and going further if need be restricted to only the smaller companies. The facility of doing some of the trainings on-line could be considered.

Also Watch: Videos – Surajit Roy, NSDC On Leveraging Apprenticeships

A few other logical next steps forward could be a well-designed compact campaign aimed at industry on the amendments in law and another aimed at sensitising the colleges and students about the benefits of apprenticeship, capacity building of states, reaching the smaller industry through states or/and through larger companies to take onto apprenticeship; linking (through API), the output of the skill eco-system both short term and long term as input for apprenticeship and again the output from apprenticeship to job portals. In fact, it would make a lot of sense for the Govt., to subsume much of the skill trainings, especially the short term trainings (STT), into the apprenticeship programme (which has a class room/lab training component built into it in any case). This would save on the huge expenditure being incurred on STTs every year. All the courses being undertaken in the ITIs could also gradually be integrated with apprenticeship to ensure better employability for it’s pass outs.

One other very important next step would be to introduce apprenticeship embedded degree courses in colleges in a big way. The Govt. has in its current year’s annual plan included a proposal to introduce apprenticeship embedded degree course in 150 colleges but the course-design has to be right. UGC’s present design for this under the BVoc programme won’t work and needs a fresh look; also this needs to be introduced in other than BVoc programmes. This is a subject matter of a separate discussion.

Further, the Govt. must put in place a process to recognise the “guru-shishya” parampara in India -the on the job training module much like apprenticeship-being adopted by the informal industry on a large scale to train youngsters (“shishyas”). But this needs to be kept outside the purview of the Act for now, since it makes little sense to compel such informal entities to confirm to the requirements of the apprenticeship laws; in the long run the Act could be amended to have a separate section to deal with informal apprenticeships. Such apprenticeship trainees, who are mostly from economically weaker sections of society, and who attain skill competency not in a classroom but through an apprenticeship mode, must be given an opportunity to get assessed- and those who pass must be given certificates of apprenticeship and formally recognized, (through the RPL method).The incentive to be built in here for the guru to register himself as a trainer should be deeper than monetary-a recognition of sorts by the Govt. and of course the incentive for the shishya would be the certificate itself. Since all of this will be grounded in reality, the momentum will sustain. And no costs are involved other than the assessment costs under RPL.

What must not be done is chasing numbers which make little sense and here-in lies the peril. In a hurry to show results with numbers which can potentially be achieved in India as far as apprenticeship is concerned, the law must not be diluted to such an extent that the very essence of the programme gets lost-a typical case of one step forward and two backwards. Too frequent changes in law will also create confusion on ground given the limited capacity of the Govt. to communicate the changes-the one made in 2014/15 have yet to reach the industry. The signaling value of apprenticeship has never been doubted by the industry and with a forward-looking legislation now in place it is beginning to work on ground. So, disruption is the last thing which is required at this stage in a rush to show numbers. The bureaucracy needs to understand that paradigm shifts like these, which require a change in mindsets, must be looked at as ONE 5-7-year programme broken up into phases rather than many disjointed capsules, with a new one being experimented with each time there is a new dispensation in the ministry. 

I will illustrate. For instance there is talk to add internships numbers under the larger  apprenticeship umbrella just to boost the overall numbers completely missing the point that while apprenticeship is a serious training intervention involving the industry, internship is a loose arrangement a product of an education eco-system deputing it’s students to a company for a temporary period without any formal contract under law, but only by way of an “attachment” or “exposure”, not necessarily involving any training on the shop/office floor of the company. Equating the two will most definitely dilute the benefits of the programme on ground. Yes, what could be considered at par are with apprenticeship are the internships in the hospital sector or article-ship in case of CA aspirants, i.e., those covered under statutes or regulations other than the apprenticeship law-these could be added to the numbers. 

Another suggestion which is being pursued in some quarters, is to do away with the principle contract between an apprentice and the employer. While a thirdparty intermediary i.e., the TPA, can be made a party to this contract to perform some of the tasks on behalf of an employer, so as to obviate the discomfort of industry to deal directly with public servants notified as apprenticeship advisors under the act. But to do away with the principle contract/relationship between an apprentice and employer altogether will not be correct as this contract is the basis of any meaningful apprenticeship programme across the world. Doing so will virtually convert apprenticeship from a training tool into an exploitative staffing mechanism at a stipend which is lower than the minimum wages. While numbers may come, industry will soon lose interest in the programme as it won’t serve the purpose. And in the long run we, as a nation, would have lost out on what we set out to achieve -to use apprenticeship as a last mile effective training tool to connect the education/skill ecosystem to the industry and ensure that we have a ready skill-force which can meet the demands of our industry.

Numbers will come on their own as the industry understand the easiness of the law and the returns from the apprenticeship, and these will be meaningful numbers. Also, I have touched upon the need and process to recognize apprenticeship in the informal sector earlier in this article. As per the 6th economic census there are approximately 500 lakh small establishments which employ less than 4 persons and hence are currently out of the formal apprenticeship umbrella. But together they employ about 760 lakh employees, and apprenticeship is the mode being used to train youngsters. Capturing even 10% of this will get the Govt. a number of 76 lakh contracts in a year. So, we need to pick the right things to do to show numbers and not things which will disrupt the essence of an otherwise well designed programme  

All in all the Govt has a sure shot winner on its table in the apprenticeship programme, something which can work without much financial commitments even in a post COVID scenario; it only needs to see and understand it. If done the right way numbers will come on its own alongside sustainability, and benefit the youth, the industry and the country. The apprenticeship programme alone can go a long way to ensure that India very quickly becomes the skill capital of the world as it will have a massive young shop/office floor exposed skill-force, ready to be employed in India and abroad.