India's ₹2 trillion push: 3 schemes to boost job creation
Finance Minister Nirmala Sitharaman has unveiled three significant employment-linked incentive schemes in the Union Budget 2024-25. Backed by a hefty allocation of ₹2 lakh crore, these initiatives aim to stimulate job creation over the next five years. Scheme A will offer cash benefit to first-time employees registered with the Employees's Provident Fund Organisation (EPFO). Scheme B and C will focus on job creation and support employers. Another scheme is aimed at skilling 20 lakh youth over the next five years.
Details of employment-linked incentive schemes unveiled
Scheme A will provide one month's salary in three installments, up to ₹15,000, to first-time EPFO-registered employees. This scheme is projected to benefit over 2.1 crore youth with a salary eligibility limit set at ₹1 lakh per month. Scheme B focuses on job creation in the manufacturing sector, offering incentives directly to both employees and employers based on their EPFO contributions during the first four years of employment.
Scheme C and skilling initiative announced in Budget 2024
Under Scheme C, employers will receive a reimbursement of up to ₹3,000 per month for two years for their EPFO contributions for each additional employee hired. Sitharaman has also announced a new centrally-sponsored scheme aimed at skilling 20 lakh youth over the next five years. The Model Skill Loan Scheme will be revised to provide loans up to ₹7.5 lakh with a guarantee from a government-promoted fund, which will help 25,000 students every year.
Upgradation of ITIs and financial support for higher education
As part of the skilling initiative, 1,000 Industrial Training Institutes (ITIs) will be upgraded based on the hub-and-spoke model. The government also plans to provide financial support for loans up to ₹10 lakh for higher education in domestic institutions. Prime Minister Narendra Modi underscored the budget's long-term vision stating, "This budget will decide the direction of our work for the next five years and this will lay the foundation of fulfilling our objective to make India a developed country by 2047."
