Union budget 2024: FM Sitharaman announces three schemes to boost employment

Union Finance Minister Nirmala Sitharaman presented her seventh consecutive Union Budget in the Lok Sabha on Tuesday. The issue of employment remained the key focus of FM's speech. The Union government allocated Rs 1.48 lakh crore for employment, education, and skilling.

FM Sitharaman announced three schemes for employment-linked incentives as part of the Prime Minister's package today.

The FM said the scheme would be based on the enrolment of the EPFO and focus on recognition of the "first-time employees and support to employees and employers".

Scheme A comprises 'freshers' under which the first time employees would get one month's wage in all formal sectors. The FM said incentives would benefit 30 lakh youth entering the job market by providing one monthly PF contribution.

"Will provide one month's wages to all persons newly entering the workplace in all formal sectors. Direct Benefit Transfer of one month's salary in 3 installments to first-time employees as registered in the EPFO will be up to Rs 15,000. The eligibility limit will be a salary of Rs 1 lakh per month. The scheme will benefit 210 lakh youth," FM Sitharaman said.

“Jobs has to be at the core of economic growth. It is glad to see jobs, skills and education at the core of the Budget speech. Translating the allocation and new initiatives into action, making it demand driven, not supply driven can only ensure success of this intent," Nilaya Varma, Co-Founder and CEO at Primus Partners said.

Under the Scheme B, the FM announced job opportunities in the manufacturing sector. The FM said that incentives will be provided directly to employees and employers as per the EPFO contribution in the first four years of employment.

"I am glad to see Budget 2024's focus on youth employment and skilling. The Rs 2 lakh crore allocation for employment schemes is the beginning to a brighter future. The incentives for job creation and the plan to skill 20 lakh youth over five years is what we needed.The support for higher education loans and the push for women in the workforce is also a big plus," Ankit Aggarwal, Founder and CEO of Unstop said.

Sashi Kumar, Head of Sales at Indeed called special incentives for first-time manufacturing employees and employers "promising", and added, "The government's plans to enhance skills, improve infrastructure, and support entrepreneurs are crucial steps to boost job opportunities and the economy".

Further, boosting the employment opportunities for freshers, the FM said internships will be provided to one crore youths in 500 top companies in five years under PM's packages. The stipend of the internship would be Rs 5000 monthly.

"The outlay provided for employment and skilling will help our youth from two perspectives - education and skilling loans will bring more students to the education fold thereby increasing the gross enrolment ratio (a move towards achieving 50% target by 2035)…..second, it will help prepare our youth with skills relevant for industry needs, thereby adding to the productive workforce needs of today and tomorrow," Sahil Gupta, Partner, Deloitte India said.

Ramesh Alluri Reddy, CEO at TeamLease Degree Apprenticeship welcome FM's initiative on internship. "The move will bridge the gap between theoretical education and real-world application, making graduates more job-ready".

Under Scheme C, the FM announced reimbursement to employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee.

On job creation for the manufacturing sector, Aamar Deo Singh, Sr. Vice President of Research, Angel One said, "This initiative will reimburse employers up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee, aiming to incentivize the additional employment of 50 lakh people".