The Union Budget for 2024-25 saw the government introducing five schemes to boost employment opportunities and provide skill training to young people.
While three of these schemes are geared towards increasing the employee base in the formal sector, especially manufacturing industries, by incentivising employers, the other two seek to enhance the skills of job aspirants by upgrading the Industrial Training Institutes (ITIs) and paying stipends to interns. The programmes, dubbed ‘the prime minister’s package’, are aimed at providing jobs and training to 4.1 crore youths over five years with a central outlay of Rs2 lakh crore, though the current budget got only a fraction – Rs13,000 crore – of the promised amount. The outlay for other skilling and education initiatives largely remained unchanged from the interim budget presented before the Lok Sabha polls.
Finance Minister Nirmala Sitharaman announced the schemes in her budget speech on Tuesday, against the backdrop of rising unemployment in the country. According to a recent survey by the Centre for Monitoring Indian Economy, the unemployment rate in India rose sharply to 9.2% in June 2024 from 7% in May, while employment rate, which is the proportion of employed persons in the working age population, fell from 38% to 37.6%.
The first employment-linked incentive scheme, which is expected to benefit 2.1 crore people over two years, will provide one-month wages up to Rs15,000 to all persons newly entering the workforce in formal sectors. The employees must be registered with the Employee Provident Fund Organisation (EPFO) to avail the benefits.
The second scheme, on the other hand, is focussed on enhancing the hiring of first-time employees in the manufacturing sector. Under this programme, the government will pay up to 24% of the fresher salaries, capped at Rs25,000 per month, for the first four years of employment. The employers and employees will both equally share the benefits.
For both these programmes, the employers will have to keep the employees on-board for at least one year, lest they are required to return the benefits.
As part of the third incentive scheme, the government will reimburse employers up to Rs3,000 per month for two years towards their EPFO contribution for each additional employee they hire.
The government has earmarked Rs10,000 crore for the employment-generating programmes.
In a scheme, similar to one announced by the state government recently, the Centre will provide internship support to youngsters. An internship allowance of Rs5,000 per month, along with a one-time assistance of Rs6,000, will be provided to around one crore people for on-job-training at 500 ‘top’ companies over the next five years. As of now, an allocation of Rs2,000 crore has been made for the scheme.
The government has also set aside Rs1,000 crore to upgrade 1,000 ITIs across the country, though the minister claimed that the scheme will have an outlay of Rs60,000 crore over a five-year period.
