Seizing the Demographic Dividend

One of the reasons for tightly regulating apprenticeships was to prevent companies from hiring cheap labour under the guise of an apprenticeship programme. A simpler set of provisions to streamline regulation and incentivize corporates while protecting the interest and well-being of apprentices may now be needed. How can it be made to work? The rules and regulations overseeing apprenticeships need to be changed such that employers and prospective apprentices can choose each other freely by just requiring information on what will be learnt on the job and a minimum wage. Some recommendations including those from the 2009 Planning Commission taskforce are described below: 1. Simpler regulation: A single window mechanism is needed to clear company applications for pan-India apprenticeship programmes. Currently, companies need to approach each state apprenticeship adviser separately. Partnerships between companies and industry federations should be facilitated by giving timely permissions. 2. Wider reach: Apprentices are only allowed in specified trades. Majority of graduates are not currently covered under formal Apprenticeships. In addition, the procedure to include new trades especially services, which are largely excluded, is complex and can take many months. A fully deregulated list is needed for apprenticeships to remain dynamic and in line with the changing needs of the workplace. 3. Flexibility to companies: Currently many schemes are required to be unnecessarily long (up to four years), and have rigid requirements on worker to apprentice ratio. Moreover, the penal provisions for companies, even for small violations of the rules, are very severe. Certain relaxation of rules can help give flexibility to companies. For example, the duration of apprenticeship training can be allowed to vary across trades and companies. Short-duration programmes (less than 12 months) can be freed from much of the oversight provided they pay minimum wages. Relaxing the rigid requirements on the ratio of apprentices to workers could also accelerate capacity creation. 4. Dual system of training: Partnerships between companies and educational institutions should be encouraged. Like the German model, corporates can be allowed to outsource theoretical training, and educational institutions can be allowed to outsource practical training. 5. Active exchanges: There should be active exchanges and portals, matching prospective apprentices to employers.