The Evolution of NAPS to Something Bigger: Will it Succeed?

We build a great company with the right people. People are a company’s greatest wealth. India has a labor force of 524 million, 85% of which works in the unorganized sector. In a country like India, with so much human capital, most of which is untrained, at least for jobs that demand a lot of special and uncommon skills, what better way to make use of it than through apprenticeship?

Apprenticeship would particularly benefit businesses that have a singular vision and engage people with a very special skill set. Sometimes it is difficult to acquire such talent merely by scouting for people who have the necessary skills.

They would need to have the right experience as well. Sometimes the time spent is so much and the cost of hiring and of replacing so high, it makes sense to hire apprentices. The Indian government has been encouraging apprenticeship since the time NAPS was established in August 2016 and NATS (National Apprentice Training Scheme) also came into being. By July 31, 2023, we had already trained 25 lakh apprentices.

This jump in the number of apprentices clearly attests to the fact that the NAPS program is helping people in India bridge the skill gap they may have. It also means that several industries have been recruiting more and more people under the NAPS program and gaining more skilled individuals, propelling themselves to business growth.

But India’s apprenticeship growth story does not stop there. On August 25, 2023, India replaced NAPS with NAPS 2. Some of the changes include a direct benefit transfer from the government to the candidate’s bank account. The age limit for those who want to apply under NAPS has been increased to 35.

The NAPS-2 program has the following objectives:

1) To promote on-the-job experiential learning to promote a skilled workforce.

2) To encourage establishments to have more apprentices as part of their workforce through the offer of paying a percentage of the stipend to the apprentice.

3) To upskill apprentices who have already gone through skill training programs organized by the MSDE in parts of the country.

4) To encourage the enrolment of apprentices in MSMEs located in the North-East or other aspirational districts in India.

But apprenticeship is one way to bring about the job revolution. The first step would be simple skills training. During the Interim Budget of 2024 Union finance minister Nirmala Sitharaman has announced that the government has trained 14 million youth successfully and upskilled and reskilled 5.4 million others. 3000 new ITIs (Industrial Training Institutes) have been established. This is all good and will help fill skill gaps.

But it is the state of apprenticeship that we are more interested in. Do we think NAPS-2 will achieve its goals? The answer is a resounding yes! Like any other government scheme, NAPS-2 has got its own set of KPIs outlined by the Ministry. All we did was put all the data in the past together to analyse if NAPS-2 will be a success or not. Here are our findings and why we think NAPS-2 will be a great success. The KPIs for NAPS-2 are outlined in bold and the reasons why we think NAPS-2 will be a success and how each KPI can be met is explained below:

1. % Increase in number of candidates registered and enrolled for apprenticeship training

Over 24 lakh apprentices registered and enrolled until November 2023. The aim of NAPS-2 is to reach 46 lakh apprentices in the next four years, which might seem ambitious, but is perfectly doable, given the achievements in the other KPIs and the rate at which apprenticeship has grown in India. We could come close, even if we don’t meet the target, which is great news! Hey, we were over the moon when we put ourselves on the moon, this is most certainly doable. Maybe we can celebrate the success of NAPS-2 in 4 years’ time.

2. % Increase in apprentices completing the training

According to figures from various sources, 10 lakh apprentices have completed their training, which is a success rate of nearly 42%. In the last year alone, 2.6 lakh apprentices completed their training, which is a point to note.

3. % Increase in engagement of women apprentices

The increase in the number of women apprentices in the manufacturing industry alone is 4-5x. And generally, the surge in the number of women apprentices is 7x, coming up to nearly 1.5 lakh by the end of 2023. Still not on par with men, but conditions are looking favorable. And interestingly, the pay parity is also good, with women earning as much as men.

4. % Increase in engagement of apprentices from marginalized sections of society (SC/ST/OBC)

The reservation of seats for SC/ST/OBCs is 15%, 7.5% and 27%, respectively. Though there are no numbers available for the number of apprentices from marginalized groups, the reservation of seats suggests that there would be at least 4 to 5 lakh apprentices in India from these sections of the society alone, which is something to be enthusiastic about.

5. % of eligible establishments/apprentices availing DBT

Since the commencement of NAPS, there has been a growth of 488% in the number of establishments opting for apprenticeship. Since the new rules state that post July 2023, all establishments and apprentices registered must be on DBT, the number of establishments/apprentices benefiting from it will grow rapidly.

6. % Increase in the number of establishments registered and engaging apprentices

The increase in the number of establishments opting for apprenticeship has grown from 6,755 at the end of 2019 to 40,655 at the end of 2023. This is a great spike in just a matter of 4 years, which is a growth of 600% in just the last 4 years, and quite commendable.

7. % Increase in participation of establishments from MSME sector

There are 633 lakh MSMEs in India. Adjusting for the number of apprentices (10%) they must employ under NAPS-2, the contribution of apprentices to the total number from MSMEs alone will be over 60 lakhs, if they were all to employ apprentices. This is ideal, but many MSMEs will have very few employees. Yet, it is expected that we will see many apprentices come up from MSMEs in the future.

8. Number of apprenticeship promotion activities including workshops and melas organized

More than 250 workshops were organized in 2023 itself across states and UTs in India. The national government will organize more melas and workshops in the future. As many as 350 participants attended the workshop at Telangana alone, held in January 2023.

These were state level dignitaries, who enable apprenticeship in the state. In addition to these dignitaries, there were a lot of candidates as well, nearly 4.50 lakh, all together for all the melas. Such a large turnout is truly encouraging and since this has happened at a national level across many states too, it is very commendable indeed.

Closing Words

Though we are confident that NAPS-2 will be a great success, there needs to be independent evaluations and case studies done periodically to gauge the success of initiatives under the NAPS scheme. As a Third-party administrator for NAPS, Alp Consulting is uniquely placed to provide training to apprentices on your payroll, no matter the size of your company, big, small or even an enterprise. If you feel that management of stipend payments, administration of the training or managing the apprentice payroll is a problem, let us take over. Talk to us today.