Union Budget 2024-2025: Priority 2: Employment & Skilling

23 Jul 2024 , 02:54 PM

Employment Linked Incentive

The government will implement 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.

• Scheme A: First Timers

The scheme will provide a 1-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one month’s salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to ₹15,000.

• Scheme B: Job Creation in Manufacturing

The scheme will incentivize additional employment in the manufacturing sector, linked to the employment of first-time employees. An incentive will be provided at a specified scale directly both to the employee and the employer for their EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

• Scheme C: Support to employers

The employer-focused scheme will cover additional employment in all sectors. All additional employment within a salary of ₹1 lakh per month will be counted. The government will reimburse to employers up to ₹3,000 per month for 2 years towards their EPFO contribution for each additional employee. The scheme is expected to incentivize additional employment of 50 lakh persons.

Participation of women in the workforce

The government will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes and promotion of market access for women SHG enterprises.

Skilling programme

The government has announced a new centrally sponsored scheme, as the 4^th scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in the hub and spoke arrangements 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.

Skilling Loans

The Model Skill Loan Scheme will be revised to facilitate loans up to ₹5 lakh with a guarantee from a Government-Promoted Fund. This measure is expected to help 25,000 students every year.

Education Loans

The government has announced to provide financial support for loans up to ₹10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3% of the loan amount.