The Congress has promised to enact a Right to Apprenticeship law, mandating private or public sector concerns to provide a one-year internship with part-government funding to any college degree/diploma holder on demand. The idea of forcing companies to accept candidates seeking temporary employment — which is what a legal entitlement amounts to — is bad.
The decision to hire , even if for only a year, should be the employer’s prerogative and not a government diktat. But the idea of the government subsidising an apprenticeship training system in private industry isn’t a bad one. Equally welcome is the main opposition party’s effort to make jobs for the youth a key election campaign issue, even if questions may be raised as to what stopped its own governments, whether in the past or in the states now, from implementing similar programmes.
There are costs to a firm’s decision to engage in apprenticeship training. The potential employee’s capabilities aren’t fully known at the time of recruitment, which is often based on unreliable CVs or personal recommendations. Nor does the person contribute much to the firm’s revenues during the period of training, when she’s still learning on the job. Worse, there’s no certainty that the apprentice who has acquired the requisite skills will remain after the training period is over.
These costs and uncertainties are higher for MSMEs (micro, small and medium enterprises), which can neither afford to hire people from top-notch educational institutions nor invest in training employees whom they cannot retain. This leads to a classical market failure where firms are deterred from hiring due to a lack of skilled workforce and their own reluctance to train those who may end up working elsewhere.
One way to avoid under-employment and under-provision of training at the workplace is for the government to bear part of the cost. That’s what the Congress has proposed, while billing a one-year apprenticeship in the organised private sector or government for a Rs one-lakh annual stipend as a “Pahli Naukri Pakki” or first job guaranteed scheme.
A government-financed workforce training programme incentivising companies, especially MSMEs, to hire is preferable to unemployment allowance schemes such as the Congress-ruled Karnataka’s recently rolled out Yuva Nidhi. India has to generate gainful employment for its young labour force —both a challenge and a demographic dividend-seizing opportunity. The solution cannot be doles.
Instead, it has to be skilling the youth for them to be employable. Those skills have to be imparted in schools, colleges and the workplace. The government can and should do more there, both by itself and partnering with the private sector.
