From Classroom to Career: New Pathway for Graduates with Right to Apprenticeship Program
Unemployment especially youth unemployment continues to be a serious issue in the Indian economy. A recent survey found that the rate of unemployment among the youth is 42%. This scarcity of jobs has meant that many young people after having spent money, time, and effort to earn a degree are now left with no source of income. To this, each year an additional 40 lakh graduates join the workforce with no employment opportunities. Thus, increasing the number of unemployed youths in the country.
A large working age population gainful employed can be one the greatest assets of a nation. The same population if unemployed can lead to social unrest and inequality in society. Employment also needs to account for the needs of employees. Jobs need to provide opportunities for learning and growth with dignity for the employees. The Right to Apprenticeship programme as part of the Yuva Nyay of the Congress party aims to address these issues.
Growth in the economy requires moving unskilled, low-productivity labour into the high-productivity, higher wage, formal sector. In 2018, approximately 81% of the employed were in the informal sector, with just 6.5% in the formal sector[2]. On this front, India performs worse than Bangladesh and Pakistan. There are several reasons for this, one is the shortage of skilled labour in the country. A report by the Confederation of Indian Industry, this April[3] noted that in the global context, the proportion of formally skilled workers as a percentage of total workforce stands at 24% in China, 52%in USA, 68% in UK and 80% in Japan, against a paltry 3% in India.
The report further warned that India is wasting its demographic dividend. The report highlighted the need to urgently engage the large workforce soon. While the working-age population is likely to rise by 101 million between 2020 and 2030, only 82 million are expected to be added in the two following decades. The working-age population is expected to begin declining after 2050. A rapidly falling fertility rate suggests that the window where India has a large working age population will shut rapidly. “If India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend may turn into a liability,” the CII report said.
The report also stated that high quality school education, relevant higher education and skill development aligned to industry needs are some of the prerequisites for India to become an economic powerhouse[4]. Even among college graduates’ reports find that most job seekers are not industry ready which means that there is an increased cost and time spent by the employer training people on the job. The Right to Apprenticeship programme can bridge this gap between a demand for dignified employment and a supply of skilled workers for the formal sector.
Under the Right to Apprenticeship all college graduates and diploma holders under the age of 25 will be guaranteed a right to work for one year. Each eligible individual will be placed in a public or private sector company for a period of one year. Through this programme they can build skills which is aligned with industry needs and gain on-the-job learning thus, improving their employability.
During the apprenticeship, they will be provided a stipend of Rs. 1 lakh per year shared between the government and the employer. This programme is aspirational and will provide a dignified employment guarantee for the educated unemployed youth of the nation.
At a time when businesses are facing a shortage of skilled labour, this programme will provide an opportunity for businesses to increase their skilled labour at a lower cost. On the job training which is critical for most industries requires firms to train new recruits at their own cost. The government by providing a share of payment for the employees will subsidise the cost of labour for employers This is appealing for businesses as it lowers their wage bill allowing them to expand and grow their businesses with the additional capital.
Based on GST filling currently there are about 10 lakh enterprises with a turnover of Rs. 5 crore and above. These companies are capable of absorbing and providing training to at least 5 apprentices a year which is a total of 50 lakhs jobs a year. This will ensure that new graduates will be absorbed into the workforce.
Current programmes on “unemployment insurance” focus on providing allowances to the unemployed youth. While the Right to Apprenticeship programme will provide skills and on-the-job training alongside a dignified source of income.
Many countries across the world including developed nations like Germany have of apprenticeship programmes. These programmes have been successful in helping new graduates’ transition successfully into the workforce. The Right to Apprenticeship programme will ensure that youth receive the skills and training necessary to improve their employment prospects while ensuring small firms also are able to employ skilled workers. This programme will create a future-ready labour force for the country to focus its economic policy towards.
