Prime Minister’s Rs. 2 Lakh Crore Package: Employment, Skilling and Opportunities for 4.1 Crore Youth Over 5 Years

“In this Budget, we particularly focus on employment, skilling, MSMEs and the middle class”, stated Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, while presenting the Union Budget 2024-25 in Parliament today.

Taking forward the theme of the first full-year Budget of the newly elected government, the Finance Minister announced Prime Minister’s package of 5 schemes and initiatives. The package aims to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of Rs. 2 lakh crores.  “This year, I have made a provision of Rs.1.48 lakh crores for education, employment and skilling”, she added.

Delving into further details of the announcement, Smt. Sitharaman stated that the government will implement following three 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, Finance Minister added.

Scheme A: First Timers

This scheme, which is expected to benefit 2.1 crore youth over 2 years, will provide one-month wage to all persons newly entering the workforce in all formal sectors. The eligibility limit will be a salary of Rs. 1 lakh per month. Direct benefit transfer of one-month salary will be up to Rs. 15,000 in 3 installments to first-time employees, as registered in the EPFO. This subsidy would be vital for employees and employers in hiring of first timers, by supporting their learning curve before they become fully productive. The employee, in turn, must undergo compulsory online financial literacy course before claiming the second instalment. Further, the subsidy would have to be refunded by the employer if the employment to the first timer ends within 12 months of recruitment.

Scheme B: Job Creation in Manufacturing

Aiming at substantial hiring of first time employees in manufacturing, this scheme will incentivize additional employment in the sector, thereby is expected to benefit 30 lakh youth entering employment, and their employers. An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment. The subsidy would have to be refunded by the employer if the employment to the first timer ends within 12 months of recruitment.

Scheme C: Support to Employers

This employer-focussed scheme will cover all additional employment within a salary of Rs. 1 lakh per month in all sectors. New employees under this Part need not be new entrants to EPFO. The government will reimburse to employers up to Rs. 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.

The 4^th scheme mentioned in the Budget Speech under the Prime Minister’s package is a new centrally sponsored scheme, for skilling in collaboration with State governments and Industry. The scheme, with a total outlay of Rs. 60,000 crore, aims at skilling 20 lakh youth over a 5-year period. To achieve this target, 1,000 Industrial Training Institutes (ITIs) will be upgraded in hub and spoke arrangements with outcome orientation.  Further, the course content and design will be aligned to the skill needs of industry and new courses will be introduced for emerging needs.

Talking about the 5^th scheme under the Prime Minister’s package, the Finance Minister stated, “Our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years (participation of companies is voluntary). They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities”. 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 per cent of the internship cost from their CSR funds, Smt. Sitharaman added.    Youth aged between 21 and 24, who are not employed and not engaged in full time education, will be eligible to apply.