In her Budget speech, Finance Minister Nirmala Sitharaman announced a provision of Rs 1.48 lakh crore for education, employment, and skilling to bridge the widening skill gap and to boost employability.
Applauding the Modi government’s decision, Akshay Munjal, Founder and CEO of Hero Vired, said, “Amid growing concerns about the impact of artificial intelligence (AI) on job creation, the substantial allocation for these sectors demonstrates a significant commitment to developing India’s human capital.”
Sitharaman also announced a package of five schemes and initiatives aimed at facilitating employment, skilling, and other opportunities for 4.1 crore youth over a five-year period, with an allocation of Rs 2 lakh crore.
She highlighted three two-year schemes for ‘Employment Linked Incentive’, focusing on first-timers, job creation in manufacturing, and supporting employers.
“The wage subsidy for the employees and the support to the employers shall encourage employers to hire fresh candidates for their organisations, whereas the linkage to EPFO registration shall help the cause of formalisation of jobs in the country,” Shantanu Rooj, Founder and CEO of TeamLease Edtech, told YourStory.
The scheme, focusing on first-timers, will provide a one-month wage to all persons newly entering the workforce in all formal sectors, the FM said, adding that the direct benefit transfer of one-month salary in three instalments to first-time employees as registered in the EPFO will be up to Rs 15,000.
With an eligibility limit of a salary of Rs 1 lakh per month, the scheme is expected to benefit 210 lakh youth.
The second scheme, looking to incentivise additional employment in the manufacturing sector, aims to benefit 30 lakh youth entering the workforce and their employers.
The third scheme, focused on employers, will cover additional employment in all sectors and is expected to incentivise additional employment of 50 lakh persons.
“All additional employment within a salary of Rs 1 lakh per month will be counted. The government will reimburse employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee,” she added.
With a growing focus on skilling programmes, the budget also announced a new centrally-sponsored scheme in collaboration with state governments and industry, which would skill about 20 lakh youth in five years.
Moreover, the government would upgrade 1,000 industrial training institutes (ITIs) in the hub and spoke arrangements with outcome orientation, and will align the course content and design to the industry needs and introduce new courses for emerging needs.
TeamLease Edtech’s Rooj emphasised that the government should implement the same initiative in all ITIs in India—which play an important role in skilling the youth in several relevant vocational skills—and not limit it to the identified 1,000.
Besides the above schemes, the government will also launch a comprehensive scheme to provide internship opportunities in 500 top companies to one crore youth in five years.
Rooj said the government should allow all employers to benefit from the scheme and not limit it to the top 500 employers only.
“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% of the internship cost from their CSR funds,” the Finance Minister said.
Mayank Kumar, Co-founder and MD of upGrad, believes the internship scheme will bridge the industry-academia gap and enhance employability, empowering India’s youth with the opportunities to bridge the talent supply demand across global jobs.
On the loans front, Sitharaman announced financial support for loans of up to Rs 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,” she explained.
Moreover, the Model Skill Loan Scheme will be revised to facilitate loans up to Rs 7.5 lakh with a guarantee from a government-promoted fund. It is expected to help 25,000 students every year.
“With such bold commitments towards jobs, skilling, and employment, Budget 2024-25 ignites a talent revolution in India, poised to propel the nation’s youth to global leadership,” upGrad’s Kumar added.
According to a report by the Reserve Bank of India (RBI), with 1.4 billion population, India provisionally created 46.7 million jobs in FY23-24, taking the nation’s total employment to 643.3 million. India’s employment growth rate was at 6% in FY23-24 compared to 3.2% in the earlier period.
