The government aims to create more jobs by providing both employers and employees with numerous benefits.
This year’s Union Budget (presented at the Lok Sabha on July 23) provides relief to both employees and employers in the country. Finance Minister Nirmala Sitharaman announced three new employment-linked incentive schemes in order toenhance employment in the formal sector. These schemes are part of the Prime Minister’s Budget package, and will be implemented with enrollment in the EPFO - Employee Provident Fund Organization.
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
(Credit: PIB India)
The major aim behind these schemes is to boost job creation and provide various benefits to individuals. As the finance minister mentioned in her speech, "Our government will implement the following three schemes for employment-linked incentives as part of the Prime Minister's package — enrollment in the EPF, focus on recognition of first-time employees, and support to employees and employers’ scheme."
Now in this article, let's understand what these schemes are all about, and how they will benefit the commoners.
The first scheme under the initiative is designed for first-time employees entering the formal workforce with a salary of less than ₹1 lakh per month. They will be provided with a subsidy of one month's wages (up to Rs 15,000) in three installments, delivered through Direct Benefit Transfer (DBT).
This scheme will make it easier for passed-out students to step into the world of employment. And According to Sitharaman, it will benefit over 210 lakh first-time employees in the country.
It's worth noting that the employer will have to refund the subsidy if the employment ends within 12 months.
The second scheme aims to provide both employers and new employees with the required facilities to develop a competent workforce within the manufacturing sector. Under this scheme, the government offers incentives related to EPFO contributions for the first four years of employment.
As Sitharaman stated in her speech, "The scheme will incentivize additional employment in the manufacturing sector linked to the employment of first-time employees. This initiative is expected to benefit 30 lakh young individuals and generate supplementary job opportunities across various sectors.”
Notably, this scheme applies to both corporates and non-corporates.
The third scheme is designed to encourage employers (across all sectors) to hire more people. For two years, employers will get a reimbursement of up to ₹3,000 per month towards their EPFO contributions. It applies to employees with salaries of less than Rs 1 lakh per month.
Notably, one who is already under Scheme B will not get the benefits of Scheme C. And in Sitharaman's words, "The government will reimburse to employers up to ₹3,000 per month for two years towards the EPFO contribution for each additional employee."
Nirmala Sitharaman and others at a post-budget press conference
The finance minister believes that this scheme will create around 50 lakh additional jobs in the country. And it will reduce the financial burden on employers, encouraging them to increase their workforce. In the long run, it will benefit the country's economy significantly.
Additionally, Sitharaman also announced a new initiative to train 2 million youth over the next five years. As many as 1,000 ITIs (Industrial Training Institutes) will be renovated with modern infrastructure to train students better.
She also announced several measures to encourage better women's participation in the workplace. These include establishing working women's hostels, launching skilling programs, and more.
The government will soon revise its model skill loan schemes. As Sitharaman said, "The model skill loans scheme will also be revised to facilitate loans of up to ₹7.5 lakh with a guarantee from a government-promoted fund. This is expected to help 25,000 students a year."
