Finance Minister Nirmala Sitharaman introduced three new job-linked incentive schemes in the Union Budget for 2024–25 in an effort to increase employment within the formal economy.
These programs, which are a component of the Prime Minister’s budget package, are intended to promote the creation of jobs and offer significant advantages to both employers and employees.
Employment & Skilling
— PIB India (@PIB_India) July 23, 2024
➡️ Prime Minister’s Package for employment & Skilling: 3 schemes announced for ‘Employment Linked Incentive’
🔹Scheme A: First Timers
🔹Scheme B: Job Creation in Manufacturing
🔹Scheme C: Support to Employers#UnionBudget2024 #BudgetForViksitBharat… pic.twitter.com/ph6UYwDoxo
What is Scheme A?
The first program is designed to assist people who are making their first formal career entry. All first-time workers in all formal industries will get a month’s salary from the government as part of this program.
With a maximum of ₹15,000 per employee, this support will be provided in three installments via Direct Benefit Transfer (DBT). The monthly wage threshold of ₹1 lakh is the upper limit of eligibility for this scheme.
The Indian government has introduced three schemes to boost employment and economic growth.
Scheme B focuses on job creation in the manufacturing sector, specifically incentivizing the employment of first-time workers.
The government will provide incentives related to EPFO contributions for the first four years of employment, benefiting both employees and employers. This initiative is expected to benefit 30 lakh young individuals and generate additional job opportunities across various sectors.
Scheme C targets employers across all sectors, encouraging them to create additional employment opportunities. Employers will receive a reimbursement of up to ₹3,000 per month for two years towards their EPFO contributions for each additional employee earning up to ₹1 lakh per month. This initiative is projected to create jobs for an additional 50 lakh individuals.
The government has also introduced measures to increase female participation in the workforce, such as the establishment of working women’s hostels and creche facilities through industry partnerships, women-specific skilling programs, and promotion of market access for women-led self-help group enterprises.
A notable amendment has been made to the Model Skill Loan Scheme, allowing loans of up to ₹7.5 lakh with the backing of a government-guaranteed fund. Financial assistance for higher education loans up to ₹10 lakh will be extended to students in domestic institutions, with 1 lakh students slated to receive e-vouchers each year.
To further support youth employment, the government announced a new centrally sponsored skilling scheme in collaboration with states and industry. Under this program, 20 lakh youth will be skilled over a five-year period. One thousand industrial training institutes will be upgraded in a hub-and-spoke arrangement, with course content aligned to industry skill needs.
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