New Delhi: Accelerating its industry-friendly labour law reforms, the Bharatiya Janata Party (BJP) government in Rajasthan has amended the Apprentices Act to improve business environment and make it easier for industry to create more jobs.

The amendment makes it easier for industry to recruit apprentices and is the second round of labour law reforms proposed by the state government within the last 30 days.

Rajiv Mehrishi, chief secretary of the state, confirmed the development.

The amendment will now be brought before the state assembly and once approved, would be sent to the President of India for his approval.

“Amendments will be made in the Apprentices Act 1961 to create larger opportunities of Employment for the Youth.," Vasundhara Raje, chief minister of Rajasthan said on her official Twitter handle.

“We are trying to give flexibility to industry as well as to the apprentice," said Mehrishi in a telephone interview. The state government is creating a so-called single-window clearance facilitated by the state apprenticeship council as part of the change.

“We are giving them flexibility on compensations, on compliance, on infrastructure requirement," he said.

On compensation, the state government is proposing to share the cost of apprenticeship. If a company has less than 250 workers, and is hiring apprentices, the state will absorb half the cost and if the company has employees above this ceiling then the government will absorb a fourth, Mehrishi explained.

He said that this is a continuation of the labour law reforms that the state believes would improve the investment environment and create more employment opportunities.

Raje’s cabinet had previously cleared amendments to three key national labour laws: the Industrial Disputes Act, the Factories Act and the Contract Labour (Regulation and Abolition) Act. The amendments, once passed, will fundamentally alter the purview of the existing Union government labour laws in Rajasthan and make it more “employment-friendly".

As part of the Industrial Dispute Act, Rajasthan’s amendment will allow companies to retrench up to 300 employees without seeking government permission. At present, this number is restricted to 100. The changes also make it tougher to register labour unions.

When the state is making some changes, the government is keeping in mind both the industry and the workers. The issue is when a state wants to grow “it would like to have investments—domestic and FDI (foreign direct investment", the chief secretary said.

The Apprentices Act is largely focused on the manufacturing sector and most of the service sector is out of its ambit, but Mehrishi said that with service sector accounting for more than 55% of the country’s gross domestic product, the state would like the Act to apply to both manufacturing and services sectors.

The Apprentices Act will address the skill gap that characterizes the labour market in India, according to Manish Sabharwal, chairman of TeamLease Services Pvt. Ltd, a staffing and training company. “The Apprentices Act is an innovation and stands in the intersection of education and employability," Sabharwal said.

Rituparna Chakraborty, senior vice-president of TeamLease, said that despite several attempts, the central government has been unable to amend the Act since 2008.

She said that while India has 300,000 apprentices, Germany has more than 3 million. By amending the Act, the country can include 10-12 million young people in the programme. Even if a company does not absorb all the apprentices, it will at least produce job-ready individuals which can be absorbed by others, Chakraborty said.

Labour unions are opposed to the change.

“The BJP government in Rajasthan is playing to the demands of the industry. Whatever amendment it is bringing in are employer-friendly, not employees-friendly. In the name of growth, I have a sense, the state wants to promote the interest of the rich and influential business community," said D.L. Sachdeva, national secretary of All India Trade Union Congress.

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