The Union ministries of labour and employment and human resources development seem to be inspired by the “skills, scale and speed” mantra of newly-inducted prime minister Narendra Modi who led the Bharatiya Janata Party (BJP)/National Democratic Alliance coalition — which has just completed its first 100 days in office in New Delhi — to a sweeping victory in the recently concluded (May) General Election 2014.
On August 14, the labour ministry tabled an Apprentice Act (Amendment) Bill 2014, which introduces several overdue amendments to the Apprentice Act, 1961, in the Lok Sabha. The main objectives of the Bill are to attract more youth to join apprenticeship training programmes, enable industry/business establishments to rev up apprenticeship programmes and increase the intake of students into the apprenticeship programmes to job-skill the country’s human resources.
The highlights of the Amendment Bill are that it is now obligatory for all large scale manufacturing units to hire the equivalent of 2.5 to 10 percent of their employee strength as apprentices, with even non industrial units obliged to hire apprentices at revised monthly stipends ranging between Rs.3,999-6,624 — 40 percent higher than prescribed by the archaic Apprenticeship Act 1961. The major incentive to industry to take on trainees is that 50 percent of the stipends payable to apprentices hired by small scale enterprises (90 percent of the national labour force is employed in small and informal enterprises) will be reimbursed by the Central and/or state governments. A sum of Rs.536 crore has been budgeted for this scheme.
For large scale industry, the major incentive is that a mandatory provision in the mother Act which obliged companies to absorb apprentices into their labour force on completion of their training, has been dropped by the Amendment Bill. Union labour minister Narendra Singh Tomar believes the amended Apprentice Act (if and when passed by the Rajya Sabha and given assent by the President) will have a dramatic effect on skills development. According to the minister, Indian industry’s absorptive capacity for apprentices is currently 480,000 against which only 280,000 were under tutelage last year. In sharp contrast, Germany has 3 million, Japan 10 million and China 20 million apprentices working in industry and business.
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“The amendments made to the obsolete Apprentice Act, 1961 are very positive and long overdue,” says Krishen Khanna, an alum of IIT-Bombay and former promoter of two companies listed on the Bombay Stock Exchange, who forsook the corporate life four decades ago to become a vocational education and training (VET) evangelist under the aegis of an NGO named iWatch, and is primarily responsible for impacting the importance of VET on the somnambulant Union government and an indifferent public.
According to Khanna, the Amendment Bill contains many commendable revisions of the Act. For instance, it expands the ambit of the Act to all business organisations whether in manufacturing, agriculture or services who can hire up to 10 percent of their workforce as apprentices for periods of six to 36 months, paying stipends of 75-90 percent of the minimum wage prescribed by each state. “Most importantly, the earlier requirement of the Act that after completion of the training period, apprentices had to be absorbed into the organisation — a major disincentive to hiring apprentices — has been dropped as have all punitive clauses of the old Act. In my opinion the amended Act will improve skill building manifold to about 100 times from the present 280,000. Mercifully the new government has recognised that without VET skill building, employment generation is impossible,” says Khanna.
For the country’s estimated 40 million unemployed, this development which offers VET with a stipend, is undoubtedly good news. But keep your fingers crossed: the Bill isn’t law yet.
Autar Nehru (Delhi)