Reviving the manufacturing sector is imperative as it is needed to increase our GDP growth and to provide jobs. And in fact, this has triggered the Make in India initiative. Though yet to make a significant impact, the initiative is expected to push the stagnating sector (the GVA has been 18% over the past few years) to an average rate of 12.2% till FY25 leading to an overall increase from 17.1% in FY 15 to 24.7% in FY 25.The initiative also seeks to raise manufacturing (formal and informal) to 25% of GDP and to create 100 million manufacturing jobs within a decade.
While Make in India is one side of the story, the other aspect is that it could also be about Make for India. India inherently has a large population that serves as a huge consumer market, if the demographic that we are blessed with gets productively employed it will push the consumption story further. Domestic consumption has always been a big driver of growth in manufacturing sector. In fact, the rising income levels coupled will lead consumption expenditure to grow steadily at around 7.7% during FY17-FY25 and thereby fuel growth in the manufacturing sector.
To achieve the target of 25% share of manufacturing in GDP by 2025 will call for efficient productive labour. This will also involve transition of labour from farm to non-farm, informal to formal and subsistence wage to descent wage. Apprenticeship can play a huge role in achieving this objective.
Workforce from farms can be transformed into skilled labor through apprenticeships and prepare them to take up manufacturing jobs. 94% of the labor operates under unorganized sector which largely constitutes of school drop outs or uneducated. They can be channelized into formal employment through rigorous on the job training under formal apprenticeships.
Mobilization of candidates is a concern for employers, largely looming due to meager wages offered by employers which make it difficult for migrant labor to sustain living in alien location. Under Apprenticeship, minimum wages are assured which enables these candidates to live comfortably.
Research suggests that engaging with skilled workforce generates higher return on investment, which could be as high as 3 times of investment. As per the research, skilled worker takes half the time (approx. 45 days) to settle in work as compared to unskilled one (takes almost 90 days). Since they are already subject to real work environment and are technically sound, they take less time to generate output. Their errors will be minimal or no errors, resulting in minimized retakes, enhanced quality and greater business efficiencies. Also, with advent of technology and automations, jobs are getting specialized. To make mission ‘make in India’ sustainable, a demarcation needs to be made between relevant and irrelevant skills. World of work is changing and to cope up skilling and re skilling becomes imperative. Nothing’s better than apprenticeships to skill. Countries which have large manufacturing employment like China, Germany and Japan have traditionally followed ‘skilling through apprenticeships’ or ‘learning by doing’ or ‘earning while learning’ mechanism. In fact, currently, there are just 250000 apprentices in India against 20 mn in China, 10 mn in Japan and 3 mn in Germany
National Skill Mission will have to build an ecosystem for mass skilling of our youth through apprenticeships with speed and without compromising on standards. National Apprenticeship Promotion Scheme (NAPS) launched by Ministry of Skill Development & Entrepreneurship earlier this year has incentives worth 10 thousand crores for employers which will facilitate development of skilled manpower through apprenticeships. Introduction of degree apprenticeship programs by Universities approved by UGC could give a further impetus to apprenticeships, making it a preferred option for our youth to build a career. A consolidated and a coordinated effort will converge to much needed 5 million apprentices for a successful ‘Make in India’ and making India world’s Skill Capital.