Home >Industry >Manufacturing >Sops for MSMEs in the works to reform apprentice system

The Union government is working on measures to reform the apprentice system in the country, including providing incentives to small businesses for hiring apprentices and allowing industries to post them at client facilities. The skills and entrepreneurship ministry and NITI Aayog are working on the initiatives, which also includes allowing educational institutions to hire apprentices.

The draft plan also suggests adopting a franchise model, which will allow employers to deploy apprentices at client locations and take the help of third-party aggregators (TPAs) to enable industries in improving apprentice training.

Sectors such as retail, logistics and IT-ITeS have also demanded that the upper limit of engaging apprentices be hiked to 25% of their manpower strength and financial incentives be introduced for third-party aggregators. Currently, the limit is less than 15%, the draft plan said.

According to the draft documents reviewed by Mint, the ministry has received suggestion from industries for incentivizing MSMEs at least for a limited period of time.

“MSME organizations can be given some financial incentives at least for a limited period so they start adopting apprenticeship," the draft proposal said, citing industry suggestions. It further said that a cluster-based approach to address “MSME apprenticeship through third-party aggregators" is a possible option.

“In order to create ease of doing business for the industry, and engage a larger number of apprentices, TPAs may be engaged for assisting the industry. TPAs, which can work as facilitators on demand and supply side, can be a win-win solution for all stakeholders," said the draft proposal, which has been shared with stakeholders for feedback.

Apprenticeship is considered as one of the best human resource training systems as it provides trainees hands-on experience on the shop floor.

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