NITI AAYOG RELEASES REPORT ON ‘REVITALIZING APPRENTICESHIP ECOSYSTEM

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Picture Courtesy:   PIB

Context

The NITI Aayog launched a policy report titled “Revitalizing Apprenticeship Ecosystem”, to leverage apprenticeships for employment generation and skill development.

What is Apprenticeships?

An apprenticeship is a structured, paid program combining on-the-job and theoretical training to provide industry-specific skills, a salary, and a recognized qualification.

It is legally governed by the Apprentices Act, 1961.

• Governing Body: Managed by the Ministry of Skill Development and Entrepreneurship (MSDE).
• Mandatory Engagement: Establishments with 30 or more employees are legally required to engage apprentices in a band of 2.5% to 15% of their total workforce.
• Categories: The Act covers:
• Trade Apprentices (ITI pass-outs/school leavers).
• Graduate/Technician Apprentices (Degree/Diploma holders).
• Optional Trade Apprentices (Custom trades defined by employers).
• Minimum Age: A person must be at least 14 years old (18 for hazardous industries) to be an apprentice.
• Stipend: Apprentices must be paid a monthly stipend. As per the 2025 amendments, minimum rates range from ₹6,800 (for Class 5–9 pass-outs) to ₹12,300 (for graduates).
• Benefits for Employers: Through the National Apprenticeship Promotion Scheme (NAPS), the government reimburses 25% of the prescribed stipend, up to ₹1,500 per month per apprentice.
• Legal Status: Apprentices are considered trainees, not workers. Therefore, general labour laws like the Industrial Disputes Act do not apply, though health and safety provisions from the Factories Act, 1948 still hold. 

Challenges Hindering the Apprenticeship Ecosystem

Despite schemes like the National Apprenticeship Promotion Scheme (NAPS), the uptake of apprenticeships remains lower than in other developed economies.  

Institutional & Policy Barriers

• Regulatory Complexity: Confusing and burdensome documentation/compliance, especially for MSMEs (e.g., Apprentices Act, 1961).
• Lack of Unified Strategy: Fragmented oversight between ministries leads to uncoordinated efforts and inconsistent training quality.
• Weak Monitoring: Inadequate district-level systems for tracking long-term employment outcomes or ensuring accountability.
• Support & Mentorship Gaps: Lack of structured guidance causes information overload and "skill gap anxiety."

Industry & Establishment Challenges

• Limited Participation: Apprenticeship penetration is low (<1% of workforce in India vs. 3–5% globally).
• Financial & Resource Constraints: Small businesses lack dedicated staff, funding, or time for high-quality mentorship.
• Hidden Costs: Industry hesitancy persists despite NAPS incentives due to training costs and attrition risk.
• Infrastructure Deficiencies: Inadequate access to modern equipment and digital tools, particularly in rural areas.

Supply-Side & Societal Hurdles

• Societal Stigma: Vocational training is viewed as a "second-best" option to academic degrees.
• Skills Mismatch: Curricula lag behind rapid technological shifts (e.g., AI, green energy).
• Low Remuneration: Stipends often fall below minimum wage, suggesting apprenticeships are low-cost labor, not learning opportunities.

NITI Aayog's Recommendations for Revitalization

Legal & Regulatory Reforms

• Simplify the Apprentices Act, 1961, adopting a 'light-touch' regulatory approach.
• Decriminalize provisions and introduce self-certification mechanisms to improve ease of doing business.
• Focus on outcome-based regulation rather than input-based compliance.

Financial & Non-Financial Incentives

• Enhance financial support under NAPS, especially for MSMEs, and streamline the disbursement process.
• Introduce sector-specific incentives for high-growth areas and tax benefits for employers.
• Promote cluster-based and group apprenticeship models for smaller enterprises.

Quality & Appeal for Youth

• Modernize curriculum to align with Industry 4.0 skills (AI, IoT, green jobs).
• Linking apprenticeships to higher education (e.g., credit frameworks).
• Launch nationwide awareness campaigns to improve the social standing of vocational training.

Institutional Strengthening

• Strengthen the role of Sector Skill Councils (SSCs) in curriculum design and quality assurance.
• Leverage technology and data analytics for better monitoring, evaluation, and policy-making.
• Promote convergence between various skill development schemes to create a unified ecosystem.

Way Forward To Improve Apprenticeship Ecosystem

Inclusivity

Promote apprenticeships for marginalized groups, including women, Persons with Disabilities (PwDs), and youth from rural/tribal areas, to ensure equitable growth.

Informal Sector Integration

Innovative, flexible apprenticeship models are essential for formalizing skills in the informal sector.

Centre-State Coordination

Skill development is a concurrent subject. Effective revitalization depends on seamless collaboration between the central government, state governments, and local industrial bodies.

Paradigm Shift

Move from a supply-driven to a demand-driven ecosystem, where apprenticeships are seen not just as a government scheme but as a mainstream and aspirational career choice.

Learn from Global Best Practices 

• Germany's Dual VET System: Strong state-industry partnership (vocational schools and paid on-the-job training). Strong industry ownership, standardized curriculum, and high social acceptance.
• Switzerland's Model: High employer participation (over 30% of companies). Permeability between vocational and higher education, allowing apprentices to pursue university degrees

Conclusion

Revitalizing the apprenticeship ecosystem through streamlined regulations, increased industry involvement, and improved public perception is essential for a 'Skilled India' to bridge the skills gap and establish India as a global economic power.

Source:  PIB