NEW DELHI: The government is working on a fresh proposal to increase the monthly stipends paid to trainees under the National Apprenticeship Promotion Scheme (NAPS) as it looks to curb dropouts, an official told FE. It is also looking at other measures to improve retention, including incentives for third-party aggregators (TPAs) linked to apprentice completion and assessment.
The government had increased the minimum monthly stipend by 36% in September 2025, taking the monthly rates to Rs 6,800-12,300, depending on the apprentice’s educational qualification.
Under the current NAPS 2.0, the central government provides 25% of the prescribed minimum stipend, subject to a maximum of Rs 1,500 per apprentice per month. Employers pay the remaining amount. But the actual stipend can be higher than the government-prescribed minimum, depending on the employer. The official said many employers pay above the stipulated rates, with better-performing companies offering higher stipends.
Despite the sharp increase in minimum stipends in 2025, concerns over apprentice retention remain.
The proposed additional incentives aim to make apprenticeship more attractive and encourage apprentices to complete their training.
According to a 2026 NITI Aayog report, the dropout rate among apprentices engaged under NAPS rose from 16.35% in FY22 to 31.73% in FY23 and 36.27% in FY24. It eased marginally to 35.46% in FY25.
According to the official, dropouts are higher in optional trades, which are introduced to meet the specific needs of industries. Designated trades, on the other hand, are taught in ITIs and have a more established training path. Some apprentices in optional trades may also leave when they find regular jobs, the official said. “We are trying to improve retention by linking incentives to completion and assessment,” the official said.
The government is also seeking to improve completion rates through incentives for TPAs, which help bring apprentices and employers onto the scheme. The incentives will be linked to the completion of training and assessment.
The official said 6.36 lakh apprentices have been engaged under NAPS in FY27 and the ministry is hopeful of meeting its annual target. The target has been set at 1 million for FY27, down from 1.3 million in FY26.
The reduction in FY27 target comes alongside a proposed revamp of NAPS under which the government plans to increase its share of stipend support from 25% to 50%, subject to a maximum of Rs 3,000 per apprentice per month. The proposed revamp also includes additional incentives for women, persons with disabilities and socially disadvantaged groups.
The government is also looking to increase participation by micro, small and medium enterprises (MSMEs). That’s because smaller businesses often find it difficult to manage the paperwork, basic training and assessment required under the scheme. The ministry has started piloting a cluster-based approach under which industry associations would take charge of apprentices and place them with MSMEs. Basic training and assessment would be organised at the cluster level.
“MSMEs find it difficult to provide structured apprenticeship training. If they have to arrange basic training and assessment, it becomes difficult for small units. So we are piloting a model where an industry association can become the main partner, take charge of apprentices and place them with MSMEs,” the official said.
The ministry is currently talking to 4-5 regional/national industry associations about the model. Under the proposed arrangement, an association would manage apprentices and coordinate their placement with MSMEs. It would also organise basic training and assessment at the cluster level, reducing the burden on individual businesses.
As per the official, the automobile sector is presently the strongest performer in apprenticeship engagement, with better performing companies often absorbing apprentices after training. Those who are not retained may find jobs with suppliers and other businesses in the companies’ wider ecosystem.
Source: The Financial Express
