Centre raises FY27 apprenticeship target by 40%

It has allocated

₹1,250 crore for the scheme in the current fiscal year.The government has also introduced a quality benchmark, requiring that at least 40% of apprentices be rated "good" or above by the industries where they undergo training.The decision is part of the government's efforts to address growing discontent over youth unemployment and the widening gap between academic qualifications and industry requirements, especially after massive student protests that led to Dharmendra Pradhan's exit as Union education minister.The NATS, implemented under the Apprentices Act, 1961, to provide on-the-job training to graduates, diploma holders and vocational students, along with the Prime Minister Internship Scheme (PMIS), is central to the government's strategy to improve employability."The government is aiming to make more young people employable by providing training that is closely aligned with industry demand,” said one of the two people cited above.The overall unemployment rate for people aged 15 and above stood at 5.5% in June 2026, unchanged from May, according to the Periodic Labour Force Survey (PLFS), India's official employment survey. The annual unemployment rate declined to 6.5% in 2025 from 7.0% in 2024.Skill developmentExperts say the move is aimed at strengthening the link between skill development and employability, addressing a long-standing mismatch between training outcomes and labour market demand.“Someone has to evaluate how these schemes are performing. If they are not succeeding in integrating youth into the labour market, we need to understand whether the problem lies with the design of the schemes or with weak demand from the private sector,” N.R. Bhanumurthy, director, Madras School of Economics, told Mint.Bhanumurth said that the issue was on the government's agenda even before the recent developments. "That is why it introduced initiatives such as the Employment Linked Incentive (ELI) Scheme and various skilling programmes. The government is doing its part, but it is equally important to examine why the private sector is not absorbing more young workers.”Nishant Kumar, associate professor at the Centre for Political Studies, School of Social Sciences, Jawaharlal Nehru University, said the higher apprenticeship target suggests the government is trying to move beyond skilling to actual employment."It recognizes that creating jobs for young people is both an economic necessity and a political imperative. The challenge, however, is ensuring that industries absorb apprentices and turn training into long-term employment,” he said.In a written reply, the ministry of skill development and entrepreneurship told the Lok Sabha on 23 March 2026 that 523,024 individuals underwent apprenticeship training under the NATS in 2025.Mint's queries emailed to the ministries of education and finance remained unanswered.Important roleIndustry bodies have repeatedly pointed to a mismatch between the skills imparted through formal education and those required in the workplace, particularly in sectors such as electronics, semiconductors, renewable energy, defence manufacturing and advanced manufacturing.Apprenticeships can play a key role in addressing the skills gap while strengthening the micro, small, and medium enterprises workforce, said Vinod Kumar, president of the India SME Forum. "However, the success of the scheme will depend on ensuring that graduates are trained in trades aligned with their educational background and industry requirements.”“To make the programme effective, the government should also provide both monetary and non-monetary incentives to MSMEs for training apprentices, as it is small businesses, rather than large corporates, that undertake much of the hands-on training and h