Labour ministry dilutes changes to Apprenticeship Act after opposition from other ministries

NEW DELHI: Much to the relief of India Inc, internal opposition within the government has forced the labour ministry to substantially dilute the recast of the decades-old Apprenticeship Act.

Against the earlier proposal that companies would have to absorb at least 50% of apprentices they hire, they will now have to promise only some preference to them.

"The new bill will only make it obligatory for employers to give preference to apprentices instead of providing for 50% reservation," said a government official privy to the deliberations.

The change in the proposal paves the way for an amendment of this 50-year-old law, which had run into rough weather after the Planning Commission and ministries such as finance and human resources development resisted the proposed stringent law.

"A fresh draft cabinet note has been circulated and the proposal is expected to be taken up by the cabinet soon," another government official said.

The industry was also not amenable to any mandatory hiring provision in the law.

As part of the skills initiative, the labour ministry wanted the industry to provide firm employment to on-the-job trainees they hire, as it felt it would deepen companies' commitment to training and skilling apprentices.

However, some ministries and departments took a view that having such a condition in the law would not serve the objective and only make companies more resistant to providing on-the job training to those undergoing skilling programmes.

There is no global precedence of such a practice. Germany and Switzerland, where apprenticeship programme is very successful, do not insist on companies retaining trainees.

"It was felt that companies will be more positive in their response to skill shortage challenge if it remains voluntary," said the first official.

FICCI secretary general Rajiv Kumar said: "There is shortage of skilled personnel and companies are resorting to their own training programmes. Instead of mandating, it is preferable to incentivise this process for its success."

The government has identified skill development as one of the focus areas for the 12th Plan period to ensure that large section of the population becomes employable so that the country is able to reap demographic dividend. The prime minister's council on national skill development has set a target of creating a skilled workforce of 50 crore by 2022.

The labour ministry is also proposing other significant changes in the proposed law, including a new definition of a 'worker'. In this context, the concerned ministries have conveyed to the labour ministry to ensure that the new definition of 'worker' is aligned to other laws and does not create any conflict.