Rs 2 lakh crore for five years to incentivize companies to create new jobs, skill youth
Chennai: Having understood that unemployment and skill gap are major pain points for the economy, the Budget announced a few schemes for a total outlay of Rs 2 lakh crore for five years. The schemes incentivize the companies to create new employment and enhance the skill sets of an estimated 4.1 crore youth.
Three schemes providing ‘Employment Linked Incentives’ will be based on enrolment in the EPFO, recognition of first-time employees, and support to employees and employers.
The First-Timers scheme will provide a one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one month's salary in three 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 government expects the scheme to benefit 210 lakh youth.
An incentive will be provided at a specified scale directly both to the employee and the employer in the first 4 years of employment. The employer must hire at least 50 non-EPFO-enrolled workers or 25 per cent of its EPF-enrolled strength to get 24 per cent wage in the first and second years, 16 per cent in the third year, and 8 per cent in the fourth year. The government hopes this will benefit 30 lakh youth entering employment, and their employers.
Another employer-focused scheme for all sectors is for all additional employment within a salary of Rs 1 lakh per month. The government will reimburse employers up to Rs 3,000 per month for 2 years towards their EPF contribution and expects to incentivize additional employment of 50 lakh people.
Further to promote women in the workforce, the government will facilitate the setting up of working women hostels in collaboration with industry, and establishing crèches while organising women-specific skilling programmes, and promotion of market access for women SHG enterprises.
As part of skilling initiatives, 1,000 Industrial Training Institutes will be upgraded in the hub and spoke arrangement. Course content and design will be 6 aligned to the skill needs of the industry, and new courses will be introduced for emerging needs. The government wants to skill 20 lakh youth over 5 years. Of the total outlay of Rs 60,000 crore over five years, the Centre will fund Rs 30,000 crore, state governments Rs 20,000 crore, and industry will fund Rs 10,000 crore, which can include CSR funds.
Further, 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.
For students, the government announced financial support for loans 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 per cent of the loan amount.
