Powering up India’s job market: Rs 2 lakh crore in Budget for initiatives to boost employment, skilling for 41 mn youth

T he budget unveiled dedicated schemes aimed at encouraging industry to increase hiring through incentives for employers and employees to jump start job creation and reap the benefits of the demographic dividend. The latest measures also seek to give impetus to skill training and encourage companies to offer internships to youth to enhance employability.

Finance minister Nirmala Sitharaman announced a package of five schemes and initiatives to facilitate employment, skilling and create more opportunities for 41 million youth over a five-year period with a central outlay of Rs 2 lakh crore.

Scheme A will provide one month’s wages to all new appointees entering the workforce in all formal sectors in three installments and up to Rs 15,000 through direct benefit transfer. People with a salary up to Rs 1 lakh a month will be eligible.

Under scheme B, an incentive will be provided at a specified scale directly to the employee and the employer linked to the Provident Fund contribution in the first four years. As part of Scheme C, the government will reimburse employers up to Rs 3,000 per month for two years toward their Employees’ Provident Fund Organisation (EPFO) contribution for each additional employee.

"With a thematic focus on employment, skilling, MSMEs and the middle class, the budget sets forth ambitious initiatives and incentives aimed at transforming India’s socio-economic landscape,” labour and employment minister Mansukh Mandaviya said.

“The earlier Aatmanirbhar Bharat Rojgar Yojana scheme had some issues, but the new schemes announced today will provide greater ease of compliance and much clarity, and hence looks better and more attractive,” said Sougata Roy Choudhury, executive director, skills and industrial relations, Confederation of Indian Industry (CII).

“These measures collectively aim to enhance job security, promote skill development, and ensure a brighter future for youth,” said Subburathinam P, chief strategy officer, TeamLease Services. The government also revised the Model Skill Loan Scheme to facilitate loans of up to Rs 7.5 lakh with a guarantee from a government-promoted fund that’s expected to help 25,000 students every year.