Apprenticeships As Classrooms: Reforming India’s Skilling System 

The unpredictability of future job trends highlights the urgency for apprenticeship reforms in India. An often-cited anecdote about Einstein illustrates this challenge well: a student notices that the questions on an exam are the same as last year’s and points this out. Einstein replies, “The questions are the same, but the answers are different.” This reflects the dilemma facing policymakers today—how to prepare young people for jobs in a rapidly changing world. Predicting which sectors will generate jobs in the next two decades is crucial, as it determines the skills and education needed for future workers.

In India, this question has become even more pertinent, especially as the idea of district collectors creating jobs through the NREGA scheme has lost credibility. However, the challenge lies in the fact that long-term job forecasting is notoriously unreliable. Even though economists and policymakers use complex models to predict job trends, these models often fail, similar to how financial risk models faltered during crises. A comprehensive review of job forecasting efforts in countries like the US, UK, India, and Japan shows that these models have had poor accuracy. While they might accurately predict short-term trends (within 1-2 years), they fall short in guiding long-term educational policy.

Despite the uncertainty, we can still prepare for the future. While it’s possible to create broad models that predict job growth in sectors like education, healthcare, and hospitality, relying solely on predictions is not enough. Instead, we should focus on building a resilient education and employment ecosystem that can adapt to changing job market needs. This ecosystem would include a strong school system that emphasizes foundational knowledge, a flexible qualification framework that allows for seamless transitions between certifications and degrees, and efficient employment exchanges that lower job search costs for both employers and job seekers.

One of the most immediate and impactful changes would be to reform India’s apprenticeship system. Currently, India has only 300,000 formal apprentices due to the outdated provisions of the Apprenticeship Act of 1961. In contrast, smaller countries like Germany and Japan have millions of apprentices—6 million and 10 million, respectively. India has a rich history of experiential learning, as seen in traditional systems like Gurukuls and Ustaad-Shishya relationships. In many countries, apprenticeships account for up to 70% of skills development. The biggest advantage of apprenticeships is that they place employers at the centre of education, reducing the need for precise job forecasting by aligning labour supply with demand in real time.

To harness this potential, India needs a new regulatory framework that treats apprenticeships as educational opportunities rather than mere employment. Here are ten key reforms that could transform the system:

1. Recognize Apprenticeships as Education: Treat apprenticeships as educational experiences, where learning occurs on the job, rather than as traditional employment.
2. Reframe Stipends as Tuition Subsidies: Consider stipends as educational subsidies rather than salaries.
3. Allow Flexible Duration: Adapt the length of apprenticeships based on the trade and the needs of the candidate, ranging from 3 months to 3 years.
4. Unify Oversight: Remove the unnecessary division between the Ministry of Labour and HRD, which creates policy gaps and reinforces the divide between skills and higher education.
5. Enable Employer-Sponsored Programs: Allow employers to sponsor apprenticeship programs and outsource theoretical training as needed.
6. Facilitate Institute-Sponsored Programs: Permit educational institutions to sponsor programs while outsourcing practical training.
7. Incentivize Employer Participation: Replace punitive measures with incentives, encouraging more employers to participate voluntarily.
8. Streamline National Permissions: Simplify the approval process for national employers, moving away from restrictive local licenses.
9. Remove Size Limits: Eliminate size restrictions on apprenticeship programs, allowing them to scale more quickly than traditional classroom settings.
10. Subsidize Stipends: Introduce stipend subsidies as an effective labour market intervention, providing greater flexibility for employers who opt out of these subsidies.

These apprenticeship reforms address common concerns such as the exploitation of apprentices, the risk of creating permanent apprenticeships, and the potential misuse by older individuals. Linking stipends to a proportion of minimum wages can prevent exploitation while using biometric Aadhaar tracking can ensure apprenticeships remain temporary. Age restrictions could also be imposed, ensuring that these opportunities primarily benefit younger candidates. Moreover, reallocating funds from less effective programs like NREGS to apprenticeship stipends could lead to better outcomes, equipping participants with valuable skills, work experience, and better job prospects.

Rather than relying on unreliable job forecasts, India should focus on creating a flexible and adaptive education system that evolves with the changing needs of employers. Expanding the apprenticeship program with reforms to reach 10 million youth would be a critical step toward building a workforce ready for the future.

Also read: Best Practices for Enhancing Apprentice Engagement in Your Business