₹3,000 crore allocation for apprenticeship may not translate to new job creation

Sangeetha Chengappa Bengaluru | Updated on February 03, 2021

It may not necessarily translate into creating new job opportunities for youth because of the poor off-take of apprentices by India Inc, say industry practitioners

On the face of it, the FM’s allocation of ₹3,000 crore for post-education apprenticeship — training of graduates and diploma holders in Engineering, is expected to not only enhance employability of India’s youth but also create job opportunities.

While it will undoubtedly enhance employability of youth, it may not necessarily translate into creating new job opportunities for youth because of the poor off-take of apprentices by India Inc, say industry practitioners.

In an apprenticeship, most of the training is done while working for an employer who helps apprentices learn their trade, in exchange for their continued labour for an agreed period after they have achieved measurable competencies for stipends averaging ₹12,000-15,000 a month. The period of apprenticeships can vary from 6 months to a few years across sectors, those who successfully complete an apprenticeship can get certified and are often offered permanent jobs at the companies where they apprenticed.

“Apprenticeship is a great way to build employable skills, as it gives students a clear understanding of the role, requirements and skills. So any additional funding for this is welcome. However, apprenticeships are not popular with industry because of the disclosures, rules and regulations that have to be strictly followed as per the Apprentice Act 1961 and the compliance costs associated with it. Instead, India Inc prefers to offer internships to youth” said Madan Padaki, Managing Trustee, Head Held High Foundation.

Although the government has brought in several amendments to the Act to prevent its misuse just as availability of cheap labour, we will have some way to go together to translate this into significant job creation, added Padaki.

Pointing out that youngsters today demand between ₹20,000 and ₹30,000/month to intern in software companies, Deepak Agrawal, founder of B2B recruitment platform TurboHire said, “A fresh college graduate or diploma holder in engineering is not billable in the first 6-8 months of joining a company. In addition to a stipend, an employer incurs invisible expenses of allocating a seat in office, providing laptop and training and compliance costs. Unless the government subsidises 50 per cent of the stipend, it will not incentivise employers to take on apprentices, who will opt for interns instead.”

Gurpreet Singh, co-founder of Awign, a job tech start-up for gig workers and enterprises believes the huge allocation to apprenticeship will help create job opportunities only if the Government looks into a few factors. “The government must first identify which industries will create the next million jobs. Second, identify the gap between current available skills and market requirement. Third, figure out whether youth need to be trained in on-the-ground skills or digital skills. Last, match youth with jobs based on their skills and upskill them gradually along with their jobs instead of making them wait for a year to get skilled and take up jobs.”

Silver lining in the dark cloud of unemployment

Rituparna Chakraborty, co-founder and executive vice-president, TeamLease Services pegs the number of apprenticeships in the country at 3.5 lakh at present. “This is a very low number but it should grow with the government’s ₹3,000 crore allocation. Since apprenticeship rules have been simplified over the years, it has gained momentum in the last 2-3 years.” she observes. On a similar note, Sahil Sharma, co-founder of GigIndia, a marketplace for gig workers said “Internships is a luxury that only youth who have good education and belong to higher socio-economic strata enjoy. With this fresh allocation of funds, apprenticeships will be accessible to more youth, with a high probability of being absorbed as full-time employees. Small businesses will benefit hugely as they will be able to hire and absorb more apprentices aided by the government subsidy.”

The government’s partnership with the UAE to benchmark skill qualifications, assessment and certification as well the collaborative training programme with Japan to facilitate transfer of Japanese industrial and vocational skills will help to create job opportunities for our people abroad. Currently, 7-8 lakh blue collar workers go overseas every year to Gulf countries, Malaysia, Thailand and Africa. This number could double if this announcement is executed well, said Aditya Narayan Mishra, Director and CEO of CIEL HR Services.

Published on February 03, 2021

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