Budget 2024: How Govt Is Planning To Create More Jobs And Upskill Youth, 3 New Schemes Explained
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Nirmala Sitharaman also announced a new centrally sponsored scheme for skilling in collaboration with state governments and companies. (Representative/File Photo)
The employment-linked incentive schemes provide one-month wage payout to all those entering the workforce for the first time, incentivise additional employment in the manufacturing sector and also support employers
Finance Minister Nirmala Sitharaman in her seventh budget speech on Tuesday announced three employment-linked incentive schemes in the Union Budget 2024-25. The three schemes are part of the Prime Minister’s package, and will align with enrolment in the Employee Provident Fund Organisation (EPFO) and focus on the recognition of first-time employees, as well as support to both employers and employees.
The FM also announced a comprehensive internship programme in 500 top companies to 1 crore youth over a period of five years under the PM’s budget package.
“They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR (corporate social responsibility) funds,” Sitharaman said in her Budget address
What are the Employment-Linked Incentive Schemes?
Scheme A for First Timers: The scheme will provide one-month wage payout to all those entering the workforce for the first time in all formal sectors. The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs 15,000. The eligibility limit will be a salary of Rs 1 lakh per month. The scheme is expected to benefit 210 lakh youth, the FM said.
Scheme B for Job Creation: The scheme will incentivise additional employment in the manufacturing sector for first-time employees. An incentive to employee and employer will be provided with respect to EPFO in first four years of employment. The government expects the scheme to benefit 30 lakh youth entering employment and their employers.
Scheme C to Support Employers: This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary limit of Rs 1 lakh per month will be counted under the scheme. The government will reimburse to employers up to Rs 3,000 per month for two years towards the EPFO contribution for each additional employee. The scheme is expected to incentivise additional employment of 50 lakh persons, Sitharaman said.
Skill Development Scheme
The FM also announced a new centrally sponsored scheme for skilling in collaboration with state governments and companies. Around 20 lakh youth will be skilled over a five-year period under this scheme, she said. One thousand industrial training institutes are expected this to be upgraded in hub and spoke arrangement, with course content aligned to skill needs of industry.
The model skill loans scheme will also be revised to facilitate loans of up to Rs 7.5 lakh with a guarantee from a government-promoted fund. This is expected to help 25,000 students a year. Further, youth who have not benefited from any government scheme, will get support for loans up to Rs. 10 lakh for higher education in domestic institutions, she announced.
For Higher Participation of Women in Workforce
Sitharaman also announced measures to facilitate higher participation of women in the workforce, including establishment of working women’s hostels and creche facilities through partnership with industry. Further steps include women-specific skilling programmes and promotion of market access to women-led SHG enterprises.
