India has embarked on a major overhaul of its skilling framework by amending the Apprenticeship Act of 1961 through the Jan Vishwas (Amendment of Provisions) Bill, 2025. The changes replace criminal penalties with advisories, censures, and graded fines. The intention is to make the law more employer-friendly, encourage industries to engage more apprentices, and strengthen the country’s skilling ecosystem.
The move signals progressive intent, but the long record of the Apprenticeship Act offers a sobering reminder of mixed outcomes—limited successes on one hand and unfulfilled promises on the other.
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From penalties to facilitation
The Apprenticeship Act was originally designed to bridge the yawning gap between classroom education and industry requirements. It mandated that companies must take on apprentices and provide hands-on training. Yet compliance faltered because the law relied heavily on rigid penalties. Companies that failed to engage apprentices faced fines of Rs 500 per apprentice for the first three months of default, and Rs 1,000 per apprentice for every subsequent month.
Such punitive measures, combined with the threat of criminal prosecution, discouraged participation—especially among small and medium enterprises that already struggled with regulatory burdens.
Recognising this, a 2014 amendment scrapped the six-month prison term for violations. The 2025 reforms push this logic further by introducing a tiered system of advisories and fines in place of harsh penalties. The government’s stated objective is to replace “fear with facilitation.” Employers are expected to see apprenticeships not as a compliance burden but as an opportunity to shape future talent.
The numbers behind the programme
To support the Apprenticeship Act, the government launched the National Apprenticeship Promotion Scheme (NAPS) in 2016, now in its second phase. The programme subsidises apprenticeship costs by covering 25% of the minimum prescribed stipend, capped at Rs 1,500 per apprentice per month. It currently spans 49 sectors and has engaged 4.1 million apprentices between FY19 and July 2025. Of these, 2.1 million apprentices have successfully completed their training.
The current financial year alone has seen nearly 400,000 new apprentices. While this indicates steady growth, it falls short of the government’s annual target of 1.3 million. The shortfall points to the underlying reality: while the system is expanding, it is still far from achieving the scale required to meet India’s workforce ambitions.
A drop in the ocean
Measured against India’s workforce of over 500 million, the reach of apprenticeships is minuscule. Enrolling 4.1 million apprentices over six years amounts to less than one per cent of the labour force. Equally worrying is the completion rate, which hovers around 50 per cent, raising questions about programme quality and retention.
The reliance on direct benefit transfers for stipends has ensured smoother financial flows, but it has not addressed the deeper problems in the training ecosystem. Curricula often fail to keep pace with industry demands, and the participation of micro, small, and medium enterprises remains limited. For many of these firms, the costs of mentoring apprentices outweigh the modest stipend subsidy, even after the removal of criminal penalties.
The missing links
If apprenticeships are to play a transformative role in India’s skilling landscape, three interlinked gaps must be addressed. First, outreach to MSMEs has to expand significantly. These firms employ the bulk of India’s workforce, yet they often lack the information, resources, or administrative capacity to participate in apprenticeship programmes. Without their involvement, the scheme will never achieve scale.
Second, training curricula need to be better aligned with emerging sectors that are driving India’s growth. Green energy, artificial intelligence, and advanced manufacturing are all facing acute skill shortages. Unless apprenticeships are redesigned to meet these new demands, India risks training workers for yesterday’s economy rather than tomorrow’s.
Third, the low completion rates highlight the need for stronger support mechanisms. Apprentices need guidance, mentorship, and career counselling to stay the course. Without such institutional support, dropout rates will remain high and the intended pipeline of skilled workers will remain thin.
The decriminalisation of penalties is an enabling step and may bring more companies into the fold. But additional incentives—such as targeted tax breaks or a larger share of stipend support—will be necessary to sustain employer enthusiasm.
Beyond skilling: The jobs question
The amendments to the Apprenticeship Act demonstrate the government’s intent to align skilling with employment readiness. Yet skilling alone cannot solve the challenge of jobs. Training millions of young people without expanding employment opportunities risks creating a pool of “skilled unemployed.” This is not just a policy failure but a potential source of social discontent.
What India needs, therefore, is not just a skilling mission but a comprehensive National Jobs Mission. Such a framework should focus on generating labour-intensive employment, strengthening rural livelihoods, and preparing the workforce for rapid technological transformation. Skilling must go hand-in-hand with job creation; otherwise, the promise of apprenticeships will remain unfulfilled.
The 2025 amendments to mark progress by shifting the Apprenticeship Act from punitive enforcement to a more facilitative framework. This is an important step in reducing compliance anxiety, encouraging participation, and signalling a more pragmatic approach to labour regulation.
But the larger challenge remains. For a country with India’s demographic weight and economic aspirations, the current trajectory of both job creation and skilling is inadequate. Without bolder measures—expanding apprenticeships across MSMEs, aligning training with new-age sectors, and embedding skilling within a broader employment strategy—the vision of an employment revolution will remain elusive.
The journey towards a future-ready workforce has begun, but the strides must be larger and more determined.