Applications generated under the National Apprenticeship Promotion Scheme (NAPS) plunged to a six-year low in 2025 despite employers continuing to offer apprenticeship opportunities, according to data from the scheme’s public dashboard. The number of applications generated fell to 401,560 in 2025, the lowest since 2019. Applications had peaked at 4.28 million in 2022 before declining to 2.97 million in 2023 and 2.53 million in 2024. The latest figure is more than 90 per cent below the 2022 peak.
Global and Indian Apprenticeship Decline
Headlines in Business Standard screamed louder than the loudest Deepavali Firecracker. Apprenticeship applications under the National Apprenticeship Promotion Scheme (NAPS) in India have hit a six-year low of just over 4 lakh, reflecting a broader global shift in how early-career paths are viewed. While organizations continue to post opportunities on government portals, actual candidate demand has plummeted significantly. This downward trend highlights a systemic disconnect between the current structure of vocational training and the immediate financial, professional, and cultural needs of young job seekers.
Pic Courtesy: Gemini
Aspirational Deficit Among Youth
A fundamental roadblock is the complete lack of aspirational value associated with technical and vocational training among modern Indian youth. For decades, the societal narrative has tightly coupled career success and white-collar prestige exclusively with engineering, management, or traditional professional degrees. Apprenticeships are widely misperceived as a last-resort fallback for academic underachievers or low-income segments, carrying a heavy social stigma. Because these programs fail to offer the visible social mobility, corporate lifestyle allure, or digital-age prestige that Gen Z candidates actively seek, the youth naturally distance themselves from blue-collar or shop-floor training pathways.
Structural Bottlenecks within the NAPS Framework
Beyond individual candidate hesitation, NAPS suffers from rigid operational design flaws that stifle its effectiveness. The scheme enforces standardized, inflexible curriculum templates that fail to adapt to rapid technological disruptions like artificial intelligence and automation. This curriculum lag means candidates often invest months learning outdated industrial practices that bear little relevance to modern factory floors or corporate workplaces. Additionally, the scheme lacks robust, independent quality auditing mechanisms to monitor training execution. This absence of accountability allows substandard training centers to operate freely, diminishing the actual educational value delivered to the candidate.
Reimbursement Delays and Industry Hesitation
Furthermore, financial friction within the NAPS administrative pipeline severely dampens stakeholder enthusiasm. The mechanisms through which the government reimburses partial stipends to participating companies are plagued by bureaucratic red tape and prolonged processing timelines. For small-scale employers operating on tight liquidity, delayed payouts turn a supposedly incentivized scheme into a financial strain. This cash flow bottleneck, combined with complex onboarding compliances, actively discourages thousands of potential employers from participating, thereby shrinking the overall pool of quality opportunities available to youth.
Core Financial Disconnect
The primary barrier to enrollment is that fixed stipends have failed to keep pace with inflation and the rising cost of living. Apprenticeship pay frequently falls below local minimum wages. When young workers relocate from smaller towns to major industrial or Tier-1 hubs to take up these roles, the compensation fails to cover basic food, transport, and rent. Without built-in accommodation or travel support, pursuing an apprenticeship becomes financially unviable for lower-income applicants who must instead prioritize immediate, higher-paying retail or service work.
Deepening Exploitation and Dead-End Pathways
High dropout rates and declining completion metrics—which have fallen to 25.47% according to NITI Aayog—point to severe structural issues within corporate programs. Many candidates exit early after realizing that employers utilize them as low-cost, temporary workforce replacements rather than providing high-quality skill training. This frustration is compounded by long, complex corporate application processes, a general lack of career clarity, and the absence of a structured, guaranteed pathway translating the temporary training contract into a stable, full-time salaried job.
Cultural Bias and Alternative Skill Channels
Traditional academic paths and government exam preparation still hold massive social equity and prestige over vocational routes. Many parents and schools continue to push formal university degrees, causing youth to choose underemployment while studying for public sector exams rather than accepting a corporate apprenticeship. Simultaneously, the younger generation is turning to flexible alternative channels like short-term certifications, bootcamps, freelance networks, and creator-economy gigs, which offer rapid revenue without binding them to a rigid multi-year physical training contract.
Regional Gaps and Administrative Friction
Apprenticeship opportunities are highly concentrated, with just ten states accounting for over 80% of all engagements, leaving youth in regions like the North East or central India with few local choices. Micro, Small, and Medium Enterprises (MSMEs) widely avoid the ecosystem due to cumbersome regulatory compliance. Furthermore, digital fragmentation across separate platforms, such as NAPS for general trades and NATS for graduates or diploma holders, creates severe administrative friction and confusion for applicants seeking a streamlined process.
Overhaul Blueprint
To reverse this decline, policy frameworks from NITI Aayog suggest consolidating administrative efforts into a unified National Apprenticeship Mission. Reclaiming applicant trust requires repositioning these programs as prestigious, financially viable alternatives to traditional university education. This turnaround depends on significantly boosting stipend adequacy, offering formal social security or insurance, and actively funding travel and accommodation support for marginalized candidates.
This is presented as a constructive observation of the PM-SETU (Pradhan Mantri Skilling and Employability Transformation through Upgraded ITIs) scheme. While it is admittedly early days since launch, the significantly slow pace of implementation is deeply worrisome, and extensive discussions with various ground-level stakeholders fail to inspire confidence regarding long-term execution. (Current status of PM-SETU implementation towards the end of this article)
The scheme was originally designed to completely revamp vocational training across India by restructuring 1,000 Government ITIs into a Hub-and-Spoke model comprising 200 Hubs and 800 Spokes. The core objective was to switch from a rigid government-led training style to an industry-managed system where Anchor Industry Partners (AIP) hold a 51% stake in a Special Purpose Vehicle to run the clusters, while government funds up to 83% of the costs. However, rollout has hit significant roadbumps and progress is moving much slower than acceptable. The scheme remains stuck firmly in pre-implementation and tendering stages as states struggle to finalize Requests for Proposals from corporate entities. Beneath this sluggishness lie deep, structural defects in scheme design.
Bureaucratic Friction and Administrative Gridlock
The 51:49 public-private partnership structure sounds good on paper, but it creates intense administrative gridlock. Corporate agility is consistently bottlenecked by traditional, slow-moving government approval cycles. State governments have had to frequently ask the Ministry of Skill Development for clarifications on how to frame agreements, creating massive administrative drag that stalls ground-level execution.
Non-Standardized Portability and Localized Syllabi
Because each Anchor Industry Partner customizes curriculum to fit its own specific factory needs, a syllabus created in Karnataka might differ completely from one in Haryana. If these customized courses do not align perfectly with the National Skill Qualification Framework, student certificates lose value if graduates move out of that specific industrial cluster, severely limiting interstate labour mobility.
Dual Competence Requirements for the Oversight Body
A major institutional weakness is lack of a specialized governance structure capable of managing this transition. An oversight body tasked with managing a massive transformation like PM-SETU cannot function merely as an auditing entity or a bureaucratic ledger-keeper. Because the public-private structure of Special Purpose Vehicles relies on complex escrow accounts and performance-linked milestones, oversight body requires deep financial competence to track milestone-based disbursements, audit asset monetization strategies, and verify whether valuations attached to corporate contributions are fair.
Equally vital is domain delivery competence. The governance framework must include professionals from emerging technical sectors capable of evaluating pedagogical quality, monitoring technology lifecycles, and ensuring that customized curricula maintain alignment with the National Skill Qualification Framework. Without this dual expertise of financial stewardship and deep vocational understanding, the oversight mechanism risks reducing its function to checking boxes rather than ensuring genuine instructional quality and wage-verified placements.
Critical Deficit in Trainer Ecosystems and Pedagogical Gaps
The most severe operational bottleneck threatening PM-SETU is acute non-availability of qualified trainers, a crisis that extends all the way up to master trainers responsible for training other instructors. Installing advanced robotic arms, automation kits, and CNC machines is entirely redundant without personnel capable of teaching students how to operate them. India faces a massive structural deficit in instructors who understand modern technologies like EV maintenance, AI-driven logistics, and smart manufacturing.
This human resource vacuum cannot be solved simply by importing personnel from factory floors. While industry experts possess deep technical knowledge, they frequently lack the vital pedagogical skills required to manage classrooms, design curricula, and break down complex industrial concepts for adolescent learners. Teaching is an entirely different capability set than manufacturing. Conversely, existing ITI faculty lack exposure to modern automation, leaving a massive gap between industrial reality and classroom instruction. The Training-of-Trainers framework within PM-SETU is lagging far behind infrastructure targets, creating a situation where high-tech labs sit idle because there is a total absence of individuals who can both operate the technology and teach it effectively.
Corporate Dilemma and Capitalist Paradox
The reliance on private companies to co-invest and manage these ITI clusters has exposed a fundamental capitalist paradox where Anchor Industry Partners face zero incentive to spend corporate resources to act as public charity, especially if it risks creating talent pipelines for direct rivals. Because ITI graduates are free agents, Anchor Industry Partners cannot legally force them to stay. A competitor who spent zero rupees on training can simply offer these newly skilled graduates slightly higher salaries and steal them away, forcing the investing company to subsidize its competitor’s HR department. Furthermore, teaching cutting-edge Industry 4.0 skills requires exposing internal operational workflows and proprietary tools, creating massive intellectual property risks regarding leakage to rivals. Finding top-tier industrial partners willing to invest heavily in remote, rural Spoke ITIs is also incredibly difficult, as most industrial giants remain concentrated around major manufacturing zones.
Strategic Perks Designed to Attract Private Investment
To convince Anchor Industry Partners to take these risks, the scheme pitches specific operational advantages. While companies cannot legally lock students in, they get exclusive, year-round access through on-the-job training inside corporate facilities. By graduation, these students are fully integrated into company culture and machinery, requiring zero onboarding time. Additionally, major corporations rely on hundreds of Micro, Small, and Medium Enterprise vendors. By managing a PM-SETU hub, an Anchor Industry Partner can train youth who will work for their supply chain vendors, which directly raises component quality and reduces defect rates. Finally, setting up a state-of-the-art training center independently requires 100% private funding, whereas PM-SETU provides up to 83% government funding for capital expenditure, allowing companies to build high-tech training ecosystems for a fraction of market price.
Policy Revisions Required to Accelerate Progress
To get PM-SETU back on track, government needs to implement structural course corrections that address both administrative delays and corporate anxieties. The Ministry should allow Anchor Industries to sign reasonable, legally binding apprenticeship-to-hire contracts where students agree to work for the partner firm for 18 to 24 months post-graduation in exchange for subsidized education. To deter poaching, competing firms hiring a graduate within two years of graduation should be mandated to pay training clawback fees directly to the original investing Anchor Industry Partner.
To resolve the teaching crisis, the government must collaborate with central universities and corporate partners to launch specialized pedagogical diplomas for engineers, transforming industry experts into certified educators. Funding must be aggressively diverted into mandatory corporate training stints for existing ITI faculty. To solve regional disparity, government should offer higher fiscal incentives or tax breaks for companies managing remote Spoke ITIs. Furthermore, the Ministry must mandate a core 70% standardized syllabus aligned with national frameworks, confining industry-specific training to the remaining 30% to ensure certificate portability. Finally, state-level single-window clearance channels must be created to fast-track corporate entity formation, and funding milestones should be strictly tied to actual graduate placement wages rather than mere enrollment numbers.
Several state governments have moved swiftly into the active bidding phase with substantial financial outlays. Haryana has issued an RFP for the Chhara ITI Cluster Upgradation in Jhajjar with a massive project outlay of ₹241 Crore, alongside onboarding project monitoring consultancies. Rajasthan’s Directorate of Technical Education has aligned its tenders with a similar ₹241 Crore per cluster framework, utilizing a structured funding split where the state and center cover 83% of costs, leaving a mandatory 17% (approximately ₹41 Crore) for the winning industry bidder. In the northeast, Assam has invited bids for the Guwahati Cluster, comprising ITI Guwahati as the hub and four surrounding spokes with an estimated project value of ₹281 Crore. Meanwhile, Andhra Pradesh has released highly localized, cluster-specific RFPs targeting key hubs like Kurnool, Dhone, Nellore, and Vijayawada to establish specialized training ecosystems.
Cluster Management and Upgradation Mandates
The technical and financial mandates embedded within these state tenders reflect a uniform strategy to decentralize ITI governance and future-proof the curriculum. Winning bidders across states like Odisha, Uttar Pradesh, Uttarakhand, and Tripura are required to establish a Section 8 non-profit Special Purpose Vehicle (SPV), maintaining a 51% industry stake against a 49% government share to ensure operational autonomy. Furthermore, the RFPs strictly bind the selected partners to upgrade infrastructure and introduce the DGT’s newly curated, future-ready courses. This ensures that the upgraded clusters move away from legacy trades and pivot aggressively toward high-demand sectors, including artificial intelligence programming, drone technology, green hydrogen production, semiconductor manufacturing, and 5G infrastructure.
Onboarding Status of Anchor Industry Partners (AIP)
The rollout of the ₹60,000-crore PM-SETU scheme has officially transitioned from the bidding phase to execution, with Andhra Pradesh becoming the first state in India to onboard an Anchor Industry Partner. This milestone was formalized by the Ministry of Skill Development and Entrepreneurship (MSDE) during the third National Steering Committee meeting.
While AM/NS India is the first to achieve final, formal clearance to begin operations, several other major industry leaders are heavily engaged in the final stages of the selection process. Companies like Hindustan Aeronautics Limited (HAL), Hero MotoCorp, Bajaj Auto, and ITC Limited have actively submitted proposals. With 12 states having already closed or nearing the closure of their initial Request for Proposal (RFP) timelines, the central ministry expects a wave of additional AIP onboardings and cluster approvals to be cleared in the coming months.
References
Ministry of Skill Development and Entrepreneurship (MSDE) Parliamentary Replies: Unstarred Question responses in both the Lok Sabha (Question No. 4939 & 5928) and the Rajya Sabha (Question No. 3794) answered in March 2026.
Press Information Bureau (PIB) Delhi: The Ministry reiterated these exact numbers in official government press releases titled “Operationalisation of PM–SETU” and “ITI Upgradation Under PM SETU”, issued by the Press Information Bureau.
This is in continuation with my earlier article Degree is the Usher at the Door, Only Skill keeps you in the Room which related to huge amount of unspent funds budgeted for Skill Development in India. You can click on the link to read the same. Thanks to Ms Sheila for capturing the entire 4 hour talk delivered yesterday for a particular Skill Development Institution and sharing it with me. The content is mostly unedited and shared directly. This part was focussed on Remedies to the problem. Here we go…
While the government focuses on outlay (money) and enrollment (numbers), the quality of delivery—the actual human interaction between trainer and student—is where the system often collapses. I call these factors the Silent Killers of the Indian skilling ecosystem.
A sharp look at the structural decay that is described above and how it’s being (or not being) addressed:
In many ITIs and other skill training centers, instructors are permanent employees or long-term staff who haven’t stepped onto a factory floor in 10–15 years. They are teaching Industry 2.0 concepts (even that, theoretical) to a generation that needs to work in Industry 4.0. A Certified Trainer is often just someone who passed a 10-day Training of Trainers (ToT) program. As noted earlier, they may have the certificate, but they lack the muscle memory of the trade. Author suggests to strongly push for Dual System of Training (DST) and Flexi-MoUs, where industry experts are invited to teach, and trainers are sent back to factories for refresher stints.
Cannot Teach Industry 4.0 with Industry 2.0 Theory PC: Gemini
It would be incomplete if we don’t address the elephant in the room. The Leadership with Topline vs. Pedagogy approach
Many private Training Institutions operate like factories. Their Topline is the number of enrollments they can claim fees for or for government subsidies; their Bottom line is the cost-cutting on equipment and low trainer salaries. As a result, Training becomes a rote exercise for compliance rather than an educational one. If the leadership doesn’t understand pedagogy (the how of teaching), they view simulators and modern labs as unnecessary expenses rather than essential tools.
Though The NCVET (National Council for Vocational Education and Training) has started de-linking and de-affiliating thousands of non-performing affiliated centers (over 400 ITIs recently), there is a long way to go in attaining targeted results. Pertinent to note here that even NCVET also is a body of academics from the existing system who refuse to see beyond the academic box.
Coming to the Assessors, the other important cog in the wheel, most often the person training and the person assessing were often “friendly” to a detrimental level. While being friendly is a great characteristic to have in a training context, I am emphasizing this trait leading to inflated pass percentages that didn’t reflect actual skill. Same issue of lack of industrial exposure persists with Assessors too. In my personal experience, have witnessed assessors coming in to assess trainees who underwent high precision manufacturing and assessor who was seeing a CNC for the first time and had no clue about what the trainees were doing. He had no abilities to create real assessment criteria (like tampering the code and getting trainee to fix it). In the end, it was easy to steam roll him into “submission” Unless assessor have the ability to ensure that a student can actually do what the certificate says, this again is an exercise in futility.
In the Indian community, a Guru is traditionally respected, but in skilling, they are often underpaid and undervalued. Until the Trainer is treated with the same prestige as a Professor, the quality will remain a detail that everyone ignores.
Here is a Pedagogy-First model designed to ensure that a skilling institute transforms from a certificate factory to a center of excellence. This addresses the issue by forcing leadership to value the craft as much as the cash flow.
A blueprint for pedagogical excellence begins with shattering the stale trainer syndrome. To keep technical expertise sharp, institutes must move away from static, lifetime roles. This starts with Mandatory Sabbaticals, requiring every trainer to spend thirty days every two years on a live industry floor to refresh their technical muscle memory. This is bolstered by the 70:30 Rule, where thirty percent of curriculum delivery is handed over to active visiting practitioners. By bringing current shop-floor language into the classroom, the institute ensures that students aren’t learning yesterday’s news. To drive this home, trainer incentives should be decoupled from seniority and instead linked directly to the placement retention rates of their graduates.
The heart of this model lies in Radical Pedagogy, summarized by the “Show, Don’t Tell” rule. Leadership must shift focus from PowerPoint decks to practical mastery, enforcing a strict 20:80 ratio—twenty percent theory and eighty percent hands-on workshop time. Assessment undergoes a similar revolution; written exams are replaced by Job Simulations. In this environment, a student does not pass by merely describing a motor; they pass by fixing a broken one under the pressure of a timer. Furthermore, peer-to-peer learning integrates leadership training into the technical grind, as senior batches mentor juniors to sharpen their communication and soft skills.
True institutional change, however, requires Leadership Accountability that looks beyond the balance sheet. Governance must treat financial health as a byproduct of quality, not cost-cutting. This means the Board of Directors must review Employer Satisfaction Scores with the same scrutiny as financial statements seriously. To prevent a disconnect from the ground reality, leadership should conduct Shadow Student Audits, spending one day a month in the labs to experience the quality of equipment and instruction firsthand. Financially, this commitment is solidified by legally earmarking some percent of annual revenue for equipment upgrades to stop obsolescence in its tracks. Finally, the system is secured by a rigorous Assessor Integrity Protocol. To eliminate the possibility of grace marks or bias, external assessors must have zero prior contact with training staff. Every final practical assessment is then backed by Video-Log Evidence, ensuring each skill was actually demonstrated and digitally archived for audit. Through these layers of industry immersion, practical obsession, and administrative transparency, an institute transforms from a mere school into a powerhouse of employability.
PC: Gemini
This approach would help an institute in more ways that one. Topline will naturally grow because the Brand Equity of their graduates will become the best marketing tool. When a Skill Certificate from a particular institute guarantees a Salary premium (higher starting salary compared to other graduates), the Aspirational Value takes care of itself.
