INTRODUCTION
During Budget 2024-25, Hon’ble Union Finance Minister Nirmala Sitharaman launched five schemes to empower adequate employment opportunities in India wherein, the proposed total expenditure is amounting to more than Rs. 2 Lakh Crore, benefitting 4.1 Crore youths nationwide.
Further, Finance Minister said the Centre will implement three schemes for ‘Employment Linked Incentive’ as part of the Prime Minister’s package which will be based upon enrolment in the Employees’ Provident Fund Organisation (EPFO), the fourth scheme is to skill 20 lakh youth over a five-year period and the fifth scheme is to provide internship opportunities for 12 months in 500 top companies in the next five years.
EMPLOYMENT SCHEMES UNDER BUDGET 2024:
- Employment Linked Incentive Scheme A: First Timers
- One (01) month’s wage as subsidy (maximum `15,000)
- Applicable to all sectors
- First timers have a learning curve before they become fully productive, subsidy is to assist employees and Employers in hiring of first timers.
- Applicable to all persons newly entering the workforce (EPFO) with wage/salary less than `1 lakh per month.
- Subsidy will be paid to the employee in three (03) instalments
- Employee shall undergo compulsory online Financial Literacy course before claiming the second instalment.
- Subsidy to be refunded by employer if the employment to the first timer ends within 12 months of recruitment.
- Expected to cover approximately one (01) crore persons per annum.
- Scheme will be for 2 years
- Employment linked Incentive Scheme B: Job creation in manufacturing
- Applicable for substantial hiring of first-time employees in the manufacturing sector
- All employers which are corporate entities and those non-corporate entities with a three (03) year track record of EPFO contribution will be eligible.
- Employer shall hire at least the following number of previously non-EPFO enrolled workers:
- 50 or
- 25% of the baseline (previous year’s number of EPFO employees)
- Employer must maintain threshold level of enhanced employment throughout, failing which subsidy benefit will stop.
- Employee must be directly working in the entity paying salary/wage (i.e. in-sourced employee).
- Employees with a wage/ salary of up to `1 lakh per month will be eligible, subject to contribution to EPFO.
- For those with wages/salary greater than `25,000/month, incentive will be calculated at `25,000/month.
- Subsidy to be refunded by employer if the employment to first timer ends within 12 months of recruitment.
- This subsidy will be in addition to benefit under Part-A
- Scheme will be for 2 years.
- Incentive will be paid for four (04) years partly to the employee and partly to the employer as follows:
| Year | Incentive (as % of wage / salary, shared equally between employer & employee) |
|---|---|
| 1 | 24 |
| 2 | 24 |
| 3 | 16 |
| 4 | 28 |
- Employment Linked Incentive Scheme C: Support to employers
- Applicable to an employer who:
- Increases employment above the baseline (previous year’s number of EPFO employees) by at least two (02) employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) and sustains the higher level, and
- For employees whose salary does not exceed `1,00,000/month
- New employees under this Part need not be new entrants to EPFO
- For two (02) years Government will reimburse EPFO employer contribution [up to] `3,000/month to the Employer for the additional Employees hired in the previous year.
- If the employer creates more than 1000 jobs:
- Reimbursement will be done quarterly for the previous quarter
- Subsidy will continue for the 3rd and 4th year on the same scale as Employer benefit in Part-B
- Not applicable for those Employees covered under Part-B.
- This subsidy will be in addition to benefit under Part-A.
- Scheme will be for two (02) years.
- Applicable to an employer who:
- Skilling Programme and Upgradation of Industrial Training Institutes
- 1000 Industrial Training Institutes (ITIs) to be upgraded in hub and spoke arrangements in five years
- New Centrally Sponsored Scheme in collaboration with states and industry
- Focus on outcome and quality of skilling
- Course content and design aligned to needs of industry
- Total outlay of ` 60,000 crore over five (05) years
- Government of India—` 30,000 crore
- State Governments—` 20,000 crore
- Industry—` 10,000 crore (including CSR funding)
- 200 hubs and 800 spoke ITIs –all with industry collaboration
- Re-design and review of existing courses
- New courses
- 1-to-2-year courses in all 1000 ITIs
- Short term specialised courses in Hub ITIs
- Capacity augmentation of 5 national institutes for training of trainers
- 20 lakh students expected to benefit
- Internship in Top Companies
- One (01) crore youth to be skilled by India’s top companies in five (05) years.
- Twelve (12) months Prime Minister’s Internship with monthly allowance of `5,000
- Applicable to those who are not employed and not engaged in full time education.
- Youth aged between 21 and 24 will be eligible to apply
- Cost sharing (per annum):
- Government – `54,000 towards monthly allowance (plus `6,000 grant for incidentals)
- Company – Rs 6,000 from CSR funds towards monthly allowance
- Training cost to be borne by the Company from CSR funds.
- Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure)
- Participation of companies is voluntary
- Applications through an online portal
- Company to select from a short list, short listing based on objective criteria with emphasis on those with lower employability
- Ineligible candidates (indicative list)
- Candidate has IIT, IIM, IISER, CA, CMA etc as qualification
- Any member of the family is assessed to Income Tax
- Any member of the family is a government employee, etc.
- Company is expected to provide the person an actual working experience on a skill in which the company is directly involved.
- At least half the time should be in actual working experience/job environment, not in classroom.
- In case the Company cannot directly do so, it must tie-up with:
- Companies in its forward and backward supply chain (e.g. suppliers or customers) or
- Other Companies/Institutions in its Group or otherwise
- Will be co-ordinated with State Government initiatives wherever applicable.
- Phase 1 of the scheme will be for 2 years followed by Phase 2 for 3 years.
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Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.
