Union Budget 2024 Outlines New Employment and Skilling Schemes to Boost India’s Workforce
News Mania Desk/Agnibeena Ghosh/24th July 2024
In her presentation of the Union Budget 2024, Finance Minister Nirmala Sitharaman unveiled a range of new initiatives aimed at enhancing India’s employment landscape and harnessing its human capital. Among the most noteworthy proposals is a financial assistance scheme designed to support freshers entering the workforce, a move expected to significantly impact both employees and employers across the country.
One of the central features of the Budget 2024 is the introduction of a wage subsidy scheme for first-time employees in the formal sector. This initiative will provide new hires with a one-month salary subsidy, capped at ₹15,000. Sitharaman explained that the scheme aims to ease the financial burden on employers who are bringing fresh talent into their organizations. By offering this support, the government intends to incentivize companies to hire new graduates and ease their transition into the workforce.
The scheme targets newcomers whose monthly salaries do not exceed ₹1 lakh. To qualify for this benefit, employees must be registered with the Employees’ Provident Fund Organisation (EPFO), which manages retirement benefits for salaried workers in India. The wage subsidy will be disbursed in three installments, with the second payment contingent on the completion of an online Financial Literacy course. This requirement underscores the government’s commitment to not only supporting job creation but also enhancing financial literacy among young professionals.
Another crucial aspect of the scheme addresses the issue of premature termination. Should an employee’s contract be terminated within the first year, the employer is responsible for reimbursing the government for the subsidy amount already received. This provision aims to ensure that the subsidy effectively supports stable employment rather than temporary or unstable positions.
The government anticipates that this scheme will benefit around one crore freshers annually and is set to be implemented over the next two years, with a total outlay of ₹23,000 crore. By providing this financial support, the government hopes to stimulate job creation and offer a substantial boost to India’s burgeoning workforce.
Additionally, Budget 2024 introduces a separate initiative aimed at enhancing internship opportunities for students and trainees. A new employment-linked incentive scheme will be established to offer paid internships at India’s top 500 companies over the next five years. Under this scheme, interns will receive a monthly stipend of ₹5,000 and a one-time assistance payment of ₹6,000 to support their career beginnings.
The scheme is designed to benefit approximately 10 million young individuals, providing them with valuable work experience and a financial cushion as they embark on their professional journeys. Companies participating in this program will be required to use their Corporate Social Responsibility (CSR) funds to cover the costs of training and bear 10% of the total internship expenses. This approach not only helps bridge the gap between education and employment but also fosters a culture of corporate contribution to skill development.
Overall, the Budget 2024’s employment and skilling schemes represent a significant step towards improving India’s job market and supporting young professionals. By addressing the financial and educational needs of both new employees and interns, these initiatives are poised to contribute to a more dynamic and skilled workforce, reinforcing the government’s broader goals of economic growth and development.
