The Union Budget for 2024-25 has sparked significant discussion due to striking resemblance of some provisions to promises made in the Congress party’s 2024 Lok Sabha election manifesto. Finance Minister Nirmala Sitharaman’s announcement of measures aimed at boosting employment, particularly for the youth, has drawn both praise and criticism. These initiatives reflect a strategic shift in the BJP-led government’s approach to addressing unemployment, a critical issue that dominated the recent election campaign. One of the standout features of the budget is the ambitious internship programme designed to provide opportunities in 500 top companies for one crore youth.
The programme offers an internship allowance of Rs 5,000 per month and a one-time assistance payment of Rs 6,000, with companies covering training costs through their Corporate Social Responsibility (CSR) funds. This initiative is remarkably similar to the Congress party’s proposed Right to Apprenticeship Act, which aimed to guarantee a one-year apprenticeship with financial support for diploma holders and college graduates aged below 25. By aligning with this concept, the government acknowledges the importance of practical experience and skill development in enhancing employability among the youth. In addition to the internship programme, the budget introduced three Employment Linked Incentive (ELI) schemes under the Prime Minister’s Package for Employment and Skilling.
Scheme A focuses on first-time employees in the formal sector, providing a direct benefit transfer of one month’s salary in three instalments. Scheme B incentivises job creation in manufacturing by supporting EPF contributions for new employees over the first four years of employment. Scheme C targets employers by reimbursing EPF contributions for additional employees, encouraging the creation of new jobs across all sectors. These schemes collectively aim to address the widespread issue of unemployment by providing targeted support to both employees and employers.
The abolition of the Angel Tax is another noteworthy element of the budget, aimed at fostering investment and supporting the start-up ecosystem. This move is intended to eliminate barriers for new and innovative businesses, encouraging entrepreneurship and job creation. The decision to remove this tax aligns with the Congress manifesto’s promise to eliminate exploitative tax schemes that hinder investment in small and micro enterprises. While these measures have been broadly welcomed, they have also drawn criticism for their perceived lack of originality and ambitious targets. Critics argue that the government’s approach, which includes setting a target of one crore internships, risks prioritising headlines over sustainable guarantees.
The Congress party, whose similar proposals were previously dismissed as unimplementable by Ms Sitharaman, has pointed out this inconsistency, questioning the feasibility of these ambitious targets within the constraints of the budget. Despite these criticisms, the budget reflects a pragmatic acknowledgment of the urgent need to address unemployment. By drawing inspiration from the Congress manifesto, the BJP-led government demonstrates a willingness to adopt effective ideas regardless of their political origins. This bipartisan convergence on employment policy suggests a broader consensus on the need for robust, innovative solutions to one of India’s most pressing challenges.