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Apprenticeship: Budget proposal set to open more avenues for youth

TE Raja Simhan Chennai | Updated on July 13, 2014

New incentives expected to channel youth away from unorganised sectors

Finance Minister Arun Jaitley in his Budget speech said the Apprenticeship Act, 1961, will be amended to make it more responsive to industry and youth.

The HR industry has been seeking such an amendment for a long time to bring in a lot more people on board for apprenticeship.

Inclusivity

In a list of 17 suggestions, the IMG recommended to bring BA, BCom and BSc graduates under the Act to enhance their skills and employability. At present, apprenticeship training is restricted to four categories of apprentices — trade apprentices (ITI pass outs, 8th, 10th & 12th pass outs), graduate apprentices (graduate engineer), technician apprentices (diploma holder) and technician vocational apprentices (10+2 vocational subjects).

E Balaji, President, People Services (HR), TVS Logistics, said the current apprentice law was enacted more than half a century ago and the business scenario has completely changed since then. The definition of worker was earlier confined only to the regular worker. The amendment will now include contractual, daily, seasonal and outsourced/agency workers. The staffing industry has now more than 1.3 million workers and they will get covered in the new definition. In the current model, every business needs to register the apprentice schemes with the respective State government agencies.

Now, businesses present in more than four States can directly register with Government. This will reduce paper work and other administrative expenses.

Rituparna Chakraborty, President, Indian Staffing Federation, said a large number of the 12-million people who join the workforce annually, can get embedded into the workplace environment of various companies learning faster and better while earning than any other skill mechanism in the country. This will immediately open up corridors for them because of their employability quotient and reduced costs of finding talent.

The amendment, especially around higher consolidated stipends being mandated, will create necessary incentives for the youth to value an apprenticeship programme as a means to future livelihood, rather than feeling tempted and compelled to join the unorganised sector. India only has three lakh apprentices while Germany has four million, Japan has 10 million and China 20 million. Through the amendment, a large part of youth with limited or no skills who are compelled to move to the unorganised sector will get an opportunity to learn while earning in the organised sector and enhance their skills.

This helps making them employable and in turn addressing India’s people supply mismatch, Mohit Gupta Director & Co-Founder, TeamLease Services. Since 10 to12 million people join the workforce every year, increasing the cap to 10 per cent under the apprenticeship category will enable companies in the MSME segment recruit more workers. This will provide multiple avenues for prospective workers to join the organised workforce through entry-level jobs, said Aditya Narayan Mishra, President (Staffing), Randstad India.

The proposed changes will address the perennial skill gap India faces by churning out industry-ready professionals for companies to absorb.

Published on July 13, 2014

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