New Delhi: The Modi government’s first budget in its third term saw a massive job push, especially in the manufacturing and formal sectors, along with incentives for skilling the youth.
This came in the backdrop of the Bharatiya Janata Party’s (BJP’s) setback in the Lok Sabha election, with rising joblessness among the youth — one of the main poll planks of the Opposition — said to have played a role in the ruling party not reaching the majority mark.
Soon after Finance Minister Nirmala Sitharaman’s budget speech Tuesday, Congress leaders were quick to claim that its “sustained campaign” against unemployment during the election resulted in the job push in the budget.
The job push saw Sitharaman announce a Rs 2 lakh crore package, including five schemes and initiatives, to facilitate employment, skilling and other opportunities. At least 4.1 crore youth will likely benefit from the package over the next five years.
Of the five, three are specifically employment-linked incentives. Under the first one, the government will provide a one-month wage as subsidy to all persons newly joining the workforce, and it will be applicable to all sectors.
As part of this initiative, the government will transfer a one-month salary up to a maximum Rs 15,000 in three installments to the employee’s account through direct benefit transfer (DBT), subject to the condition that the employees are registered under the Employees’ Provident Fund Organisation (EPFO).
The scheme, expected to benefit 2.1 crore youth, will be applicable to all first-time workers with a salary of less Rs 1 lakh per month.
“The subsidy would be vital for employees and employers in hiring of first-timers, by supporting their (the former’s) learning curve before they become fully productive,” a labour ministry statement said.
The employer, however, will have to refund this subsidy if the employment to the first-timer ends within 12 months of recruitment.
There is a caveat for the employee as well — to compulsorily undergo an online financial literacy course before claiming the second instalment.
The second of the employment-linked incentive schemes aims to boost the hiring of first-time workers in the manufacturing sector.
The government will provide an incentive, at a specified scale, directly to the employee and the employer, based on their EPFO contribution in the first four years of employment.
All employers — corporate entities and non-corporate entities with a three-year track record for EPFO contribution — will be eligible.
To avail the incentive — which will be paid partly to the employee and partly to the employer — the employer will have to hire at least 50 previously non-EPFO enrolled workers or 25 percent of the baseline (previous year’s number of EPFO employees), whichever is lower.
This scheme is expected to benefit 30 lakh youths.
The third scheme is employer-focused and will cover additional employment in the salary bracket of Rs 1 lakh per month in all sectors.
“The government will reimburse employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee hired in the previous year. The scheme is expected to incentivise additional employment of 50 lakh persons,” said Sitharaman while presenting the 2024-25 budget.
Sitharaman said the government has made provisions for Rs 1.48 lakh crore investment in education, employment and skilling in the 2024-25 fiscal.
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Skilling and internship to boost the job market
Besides the employment-linked incentives, Sitharaman announced two schemes under the PM’s package for skilling youths and providing them with internships to make them job-ready. The first scheme will skill 20 lakh youth over five years.
“A 1,000 industrial training institutes will be upgraded in the hub and spoke arrangement, with outcome orientation. Course content and design will be aligned to the skill needs of the industry, and new courses will be introduced for emerging needs,” Sitharaman said.
An outlay of Rs 60,000 crore for a five-year period has been made for this.
The government will also revise the model skill loan scheme to facilitate loans up to Rs 7.5 lakh, with a guarantee from a government- promoted fund. This measure, the finance minister said, is expected to help 25,000 students every year.
Sitharaman also announced the launch of a scheme to provide internship opportunities to one crore youth in 500 top companies, with Rs 5,000 per month as internship allowance and a one-time assistance of Rs 6,000.
The announcements are expected to boost the job market. It will be applicable to those not employed and not engaged in full-time education. Youths aged between 21 and 24 years will be eligible to apply.
The Opposition has claimed their Lok Sabha campaign pushed the government to focus on employment in the budget.
“The term ‘employment’ has made a roaring comeback in the 2024 Budget speech. This is the impact of the Congress’s sustained campaign in the 2024 Lok Sabha elections!” Jairam Ramesh, Congress MP and general secretary in charge of communications, posted on X.
Senior Congress leader P. Chidambaram claimed that Sitharaman “virtually adopted” the employment-linked incentive and the internship scheme from the Congress Lok Sabha 2024 manifesto.
“I am glad to know that the Hon’ble FM has read the Congress Manifesto LS 2024 after the election results. I am happy she has virtually adopted the Employment-linked incentive outlined on page 30 of the Congress Manifesto. I am also happy that she has introduced the Apprenticeship scheme along with an allowance to every apprentice spelt out on page 11 of the Congress Manifesto…,” Chidambaram posted on X.
(Edited by Madhurita Goswami)
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