Policy Update
Ayan Bordoloi
Background
India’s demographic dividend is the biggest economic asset that the country has but a long-standing mismatch between academic learning and industry demanded skills has been a longstanding issue of restricting the employment of the youth. The Government of India’s primary intervention has been the National Apprenticeship Promotion Scheme (NAPS), a flagship Central Sector Scheme (CSS) of Ministry of Skill Development and Entrepreneurship (MSDE), which was started in August 2016 under Apprentices Act, 1961 and relaunched as NAPS 2.0 in FY 2022-23 to expand the outreach, easy disbursal of stipend and increase penetration into Micro, Small and Medium Enterprises (MSMEs).
Forgotten, however, is the fact that NAPS is a federally-designed scheme where the delivery of the scheme on the ground is dependent on state level industrial capacity, administrative machinery and local mobilisation. Aggregate national figures which are often used to report success of a scheme can mask significant differences in the implementation of the programme in different states and regions. In this policy update, we explore NAPS 2.0 from that federal and regional perspective, not only to understand the numbers of apprentices being engaged nationwide through the scheme, but also the levels of engagement and the absence of engagement in different parts of the nation and their implications for India’s constitutionally distinct industrial geography over 2022-26.
Functioning
While NAPS 2.0’s structure on paper is nationally uniform, it is decentralised in reality. The Government contributes 25% of the prescribed minimum stipend, which is capped at ₹1,500 per apprentice per month (revised up after the 38th Central Apprenticeship Council meeting in 2025), under DBT (Direct Benefit Transfer) since its full national implementation from July 2023. Central management of registration, formation of contract and certification is done through Apprenticeship India Portal, while the Directorate General of Training (DGT) is in charge of Optional Trades and National Skill Development Corporation (NSDC) is in charge of Designated Trades.
But the machinery which does the work of mobilising employers and candidates on the ground is sub-national. The State Skill Development Missions, State Directorates of Employment and Training, and State Apprenticeship Advisers perform a wide range of responsibility of local outreach, employer registration drives and grievance redressal which varies widely from one state to another.
The scheme’s flagship outreach mechanism, the Pradhan Mantri National Apprenticeship Mela (PMNAM), is conducted monthly in only around one-third of the districts in India and therefore, has geographic coverage that is uneven across India with a lack of uniformity in the availability of awareness of the scheme. This decentralised last-mile delivery, combined with a centrally-designed delivery scheme, is the structural explanation for the difference between national growth numbers and the performance on the sub-national level, which is explored in the Performance and Emerging Issues sections below.
Performance
NAPS 2.0 has been growing steadily over the years at the national level, increasing from 3.08 lakh apprentices in FY 2020-21 to 9.85 lakh in FY 2024-25. But a report from the Nirbhay Diskrit Kalpana Aayog (NITI Aayog) dated 20 February 2026 breaks down this growth to reveal that it is mostly driven by a few states that are advanced industrially. Of the total national NAPS engagement, Gujarat accounted for 24.18% and top-ten states had between 79% and 84% of total national engagement, broadly matching earlier MSDE data which identified Maharashtra, Tamil Nadu, Gujarat, Karnataka and Uttar Pradesh as top states in terms of apprentice enrolment.
Figure 1: Concentration of NAPS Engagement by State, FY 2024-25
Source: NITI Aayog, Revitalising India’s Apprenticeship Ecosystem (Feb 2026).
By contrast, the North Eastern states and several Union Territories contribute a marginal share of national engagement. Tripura offers a telling case: as of the NITI Aayog assessment, the state accounted for just 0.09% of all Active Establishments under NAPS nationally, with only 46 of its 354 registered establishments actually active. Yet the same report notes that Tripura’s apprentices who do enter the system post comparatively strong completion rates — suggesting the constraint is one of establishment mobilisation and reach, not of apprentice capability or motivation.
The concentration problem is not confined to inter-state comparisons; it recurs within states as well. Reporting on Karnataka — itself a strong overall performer — has flagged that over half its districts log fewer than 5,000 apprentices each, indicating that even nationally successful states carry significant internal, district-level disparities. At the national funnel level, the same NITI Aayog report notes that of roughly 13.1 lakh candidates who registered for apprenticeships in FY 2024-25, only 9.85 lakh were actually engaged, and just 2.51 lakh completed their training — a steep drop-off between registration, engagement and completion that is likely to be sharper still in states with thinner establishment bases.
Figure 2: NAPS Registration-to-Completion Funnel, FY 2024-25
Source: NITI Aayog, Revitalising India’s Apprenticeship Ecosystem (Feb 2026).
Impact
There is a double edged sword here with NAPS 2.0 impacting on federal reading. On the other hand, the scheme has effectively boosted the skilling ecosystem in states with robust industrial base and existing capacity for the absorption of young, trained workers, as evidenced by AJNIFM’s third-party evaluation, which revealed that on completion of training, about 72% of apprentices surveyed across the country received a full-time job offer. In these States the NAPS act as it is supposed to, as a true link between training and formal employment.
However, the scheme’s redistributive nature, i.e. its potential to develop skilling capability in areas which are most in need of alternative employment opportunities, is not being realised as it is such a centralised thing in a few states. In contrast, states and UTs with less industrial base and where the pressure of youth unemployment or underemployment is more often than not high, get comparatively less skilling investment from the scheme, because of the national level.
Youth unemployment or underemployment pressure is often high in the states and UTs with less industrial base, but the levels of investment in skilling in these areas are comparatively low because of the national level of the scheme. NAPS 2.0’s current geography of implementation can deepen regional economic differences, however, unless a concerted effort is made to counteract them by using the kind of instrument discussed below to make targeted changes at the local level.
Emerging Issues
- The engagement of the top ten states is 79-84% of the national level and the North East and a few of UTs have small shares and NAPS 2.0 benefits remain spatially concentrated as opposed to the industrial and demographic landscape of India.
- Leftover in the registration-to-completion funnel: Nationally, only about 75% of registered candidates were actually engaged and only about 25% of registrants were actually completing training, which may be even worse in states that have fewer active establishments to absorb candidates.
- Intra-state disparities: Even states with high performance levels like Karnataka have significant inter-district variations, indicating that state level achievement is not necessarily synonymous with localised achievement and that the localised performance level of the scheme may be missed out by a state level view.
- Lack of region-specific benchmarking mechanism: Prior to the recent development of a new tool to measure and rank each state and U.T. performance relative to the size of their young population and industrial base, it was difficult to come up with interventions that were differentiated by region, and not uniform across the country.
- Further fragmentation of scheme: NAPS (MSDE) and NATS (Ministry of Education) remain as separate schemes with distinct data systems which makes it even more challenging to create a national picture of apprenticeship engagement, geographically comparable.
Way Forward
- Implement and use the Apprenticeship Engagement Index (AEI): NITI Aayog’s proposed Apprenticeship Engagement Index (AEI), a real-time, publicly accessible dashboard that ranks states and UTs based on engagement level with the youth population, industrial base and skilling infrastructure, should be operationalised and used to bring competitive federalism to the skilling space, apart from being assessed on national aggregates.
- The Apprenticeship Linked Incentive Scheme (ALIS): For the Aspirational Districts, North Eastern states and women apprentices, the higher reimbursement of stipend rate as recommended by NITI Aayog would ensure that the financial incentives will focus on the districts and the groups that it has so far touched the least.
- District Skill Committees (DSCs): To ensure intra-state disparities like the one witnessed in Karnataka are not replicated and state-level success is evenly distributed across districts, the District Skill Committees (DSCs) need to be created to align the demand for apprenticeship with the district’s demographic profile and industry profile.
- Targeted outreach in low-establishment states: States with historically low establishment activity, but high completion rates, should be targeted for outreach campaigns that tap into their strengths as a signal to employers to attract new establishments.
- Deeper integration of data systems: Deeper integration — ideally convergence — of NAPS and NATS data systems and governance as proposed by NITI Aayog would enable the policymakers to monitor the performance at the regional/ district level on a single national canvas that would be comparable.
- Regional equity as an explicit goal: While the development of large numbers of NAPS at the national level has demonstrated its value, the next steps in the reform of NAPS should be evaluated more by the distribution of national numbers across states, districts and regions in India than by the absolute number of NAPS. The most direct way to make regional equity an explicit design goal is by using instruments like the AEI, ALIS and District Skill Committees; this is particularly true for a scheme like NAPS 2.0 that scales well in an already-industrialised India.
References
- NITI Aayog, Government of India. (2026, February 20). Revitalising India’s Apprenticeship Ecosystem: Insights, Challenges, Recommendations and Best Practices.
- ThePrint. (2026, February 20). NITI Aayog finds gaps in apprentice scheme push, recommends 5-point reform plan. https://theprint.in/india/governance/niti-aayog-finds-gaps-in-apprentice-scheme-push-recommends-5-point-reform-plan/2859749/
- Business Standard. (2026, February 20). NITI Aayog seeks major overhaul of India’s apprenticeship ecosystem. https://www.business-standard.com/economy/news/niti-aayog-seeks-overhaul-of-india-s-apprenticeship-ecosystem-126022001215_1.html
- Borok Times. (2026, February 21). NITI Aayog flags gaps in Tripura’s apprenticeship ecosystem. https://boroktimes.com/niti-aayog-highlights-gaps-and-strengths-in-tripuras-apprenticeship-ecosystem/
- The New Indian Express. (2026, July 28). Karnataka’s NAPS success masks deep district-level gaps, with over half logging fewer than 5,000 apprentices. https://www.newindianexpress.com/states/karnataka/2026/Jul/28/karnatakas-naps-success-masks-deep-district-level-gaps-with-over-half-logging-fewer-than-5000-apprentices
- Press Information Bureau (PIB), Government of India. (2026). Progress of the National Apprenticeship Promotion Scheme (NAPS). Ministry of Skill Development and Entrepreneurship. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2238227
- Press Information Bureau (PIB), Government of India. (2025). Apprenticeship Reforms and the Central Apprenticeship Council’s Recommendations. Ministry of Skill Development and Entrepreneurship. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2149336
- Arun Jaitley National Institute of Financial Management (AJNIFM). (2026). Third-Party Evaluation of NAPS-2.0. (Cited by MSDE/PIB regarding the 72% full-time employment conversion rate).
- Careers360. (2024, May 4). 26% increase in enrollments for apprenticeship scheme; maximum from Maharashtra. https://news.careers360.com/26-percent-increase-in-enrollments-for-apprenticeship-scheme-naps-maximum-from-maharashtra
- The Apprentices Act, 1961 (Act No. 52 of 1961). India Code, Government of India. https://www.indiacode.nic.in/handle/123456789/1668?view_type=browse
About the Contributor
Ayan Bordoloi is an intern with IMPRI, currently pursuing his master’s in political science at the University of Delhi. His research interests lie in federalism, tribal governance, and Northeast India’s political landscape.
Acknowledgements
The author extends sincere gratitude to the IMPRI team for their guidance and support, along with the reviewers, Sruti and Arya Gupta, for their valuable feedback and insights.
Published by: Neha Kumari
Disclaimer
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