How can impact investing result in skilling the Indian youth

The rapid changes in occupations which are occurring globally and are evolving continuously as a result of the integration of automation and the impact of other industry-driven technologies are of paramount importance. Companies are trying to break their local mould and become increasingly global in their operations. 

The labour market is also witnessing a huge shift in employment in most countries and undergoing alteration from manufacturing-intensive industries to service industries. Migration patterns and the considerably newer forms of non-standard employment are affecting millions of workers. 

Change in global business development patterns and the impact of apprenticeship in the industrial environment :

A worldwide trend is being observed which is unanimous on the industrial front. There is a growing consensus among the policymakers and industry observers on the requirements to shift from an approach that deals solely with academics to the need for teaching skills in educational institutions. Policymakers from across the globe have identified the tremendous potential that lies in apprenticeship and the expansion of this model. This apprenticeship model implements work-based training under a mentor or a supervisor with the requisite theoretical knowledge of the associated subjects and earning standard wages as stipends. In Austria, Germany and Switzerland; the growing environment of extensive apprenticeship is upgrading the quality of the jobs, most notably in the manufacturing, commercial and managerial positions. 

Challenges in the Indian apprenticeship scenario :

Evidence through solid research shows that apprenticeships have extremely positive impacts on the organisations and businesses as well as apprentices, whether they are integrated into the educational systems of the country or not. The apprenticeship scenario of India was quite distressing as of late. Apprenticeships in India remained stagnant between 2000 to 2014 due to various archaic provisions of the obsolete Apprenticeship Act of 1961. The number of apprentices in India stood at just 0.28 million in 2014. Compliance-heavy processes and the shortage of sufficient infrastructure have prevented industries and other indigenous organisations from participating heavily in the engagement of apprentices in various operational fronts. 

Realising the pressing need for simplifying and easing the process of apprenticeship, the Government of India have introduced several amendments to the Apprenticeship Act of 1961 and passed the crucially important Apprenticeship Amendment Bill in 2014 and laid the foundation for the launch of the National Apprenticeship Promotion Scheme or NAPS in 2016. The Central Apprenticeship Council was also instrumental in conjunction with the Ministry of Skill Development and Entrepreneurship to execute several reforms in order to enhance apprenticeship opportunities in July of 2019. 

Impact Investing in the Apprenticeship Opportunities in India : 

A very recent analysis carried out by the Global Impact Investing Network has revealed that over 1300 organisations all across the world manage over 502 billion dollars in impact investing assets annually. Impact Investment refers to the explicit financial and other regulatory assistance cum allowance by a government or an organisation in order to expect greater returns on investment, both financially and even socially. In India, the impact investing sector has attracted over 5.2 billion dollars between 2010 and 2016, and over 1.1 billion dollars invested in 2016 alone. 

There has been a huge growth in public-private partnerships driven by Government budgetary constraints as well as the latest public management ethos and standing strong on the fact that innovation is becoming increasingly cooperative and network-based. The Government of India has come to understand the tremendous potential of this kind of investment and has started taking the value of the asset class that draws impact investment. 

The Indian Apprenticeship sector is drawing an acute interest from the Government by becoming one of the most prized impacts investing assets. The Government has therefore channelised its intent to push apprenticeship through catalysts in the form of Third Party Aggregators or TPAs who fan function synergistically and in clusters with both MSMEs and voluminous industries. The Government has issued the TPAs enough authority so that they can –

  • Assist in aggregating demand in the said clusters,
  • Pool resources in the case of Small and Medium Entrepreneurs,
  • Mobilise potential and prospective apprentices,
  • Provide basic training,
  • Facilitate the paperwork and other procedural actions and above all
  • Educate the stakeholders and industry-led powerhouses about the requirement and potential of apprenticeship and engaging apprentices in the core operations of the industry. 

The Government of India has already incentivised part of the apprenticeship training that the candidates have to undergo and also promised financial assistance to all public and private sector establishments which have been tutoring apprentices with their infrastructural resource and even integrating them in their work structure. 

Challenges that persist and the pool of opportunities that lie ahead : 

Impact investing in Apprenticeship has been a huge step adopted by the Government of India in reforming the socio-economic stature of the nation and attain sustainable measures and actions to make the social and financial enterprises thrive by accessing the capital and capable workforce that they require. 

However, there are huge challenges that lie ahead in realising the dream of becoming one of the most progressive and economically strong nations by 2030. Lack of proper knowledge, lack of awareness, lack of clarity on progression pathways and integrated credit framework, as well as a shortage of the availability of training infrastructure, are the most pertinent roadblocks that remain in the path of achieving success. Lack of framework for an apprenticeship in the informal sector is also a huge concern that needs to be addressed. According to an important survey conducted in 2018, it has been revealed that around 87% of the organisations that contribute to at least 21% of the turnover are purely informal outside their social security and tax-based constraints. The formal sector contributes to a mere 13% of the entire non-agricultural domain. 

With the right amount of impact investment and prioritising as well as strategising the next course of actions, India will be able to reach huge margins of profit and progress overall.

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

More To Explore

Do You Want To Boost Your Business?

drop us a line and keep in touch

Submit Your Details

Please fill in your basic details to schedule a free call.