Finance Minister Nirmala Sitharaman on Tuesday announced a mega Prime Minister’s package of five schemes and initiatives aimed at facilitating employment, skilling, and other opportunities for 4.1 crore youth over a five-year period with a Central outlay of Rs. two lakh crore.
“This year, I have made a provision of Rs 1.48 lakh crore for education, employment and skilling,” she said while presenting the General Budget in the Lok Sabha.
”In this Budget, we particularly focus on employment, skilling, MSMEs, and the middle class,” she said.
Delving further into the details of the announcement, Mrs Sitharaman stated that the government would implement the 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.
Scheme A: First Timers
This scheme, which is expected to benefit 2.1 crore youth over 2 years, will provide a 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 three instalments to first-time employees, as registered in the EPFO. This subsidy would be vital for employees and employers in hiring first-timers, by supporting their learning curve before they become fully productive. The employee, in turn, must undergo a 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 incentivise additional employment in the sector, and thereby is expected to benefit 30 lakh youth entering employment, and their employers. An incentive will be provided at specified scale directly to both the employee and the employer with respect to their EPFO contribution in the first four 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 two years towards their EPFO contribution for each additional employee. The scheme is expected to incentivise additional employment of 50 lakh persons.
The 4th 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 five-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 5th scheme, the finance minister stated, “Our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in five years (participation of companies is voluntary). They will gain exposure for 12 months to real-life business environments, 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, Mrs Sitharaman added. Youth aged between 21 and 24 years of age, who are not employed and not engaged in full-time education, will be eligible to apply for the scheme.