New Delhi: Finance Minister Nirmala Sitharaman has announced three employment-linked incentive schemes in the Union Budget for 2024-25 aimed at enhancing employment in manufacturing and other formal sectors of the economy. These schemes, based on enrollment in the Employees’ Provident Fund Organisation (EPFO), focus on recognizing first-time employees and supporting both employees and employers.
Additionally, the Finance Minister introduced a comprehensive internship scheme aimed at providing internship opportunities in 500 top companies to one crore youth over five years under the PM’s Budget package.
“They will gain exposure for 12 months to the real-life business environment, various 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 percent of the internship cost from their CSR (Corporate Social Responsibility) funds,” Sitharaman explained in her Budget address.
Details of the three employment-linked incentive schemes outlined in the Budget speech are as follows:
Scheme A: For First-timers This scheme will provide a month’s wage to all employees entering the workforce in all formal sectors. It entails a direct benefit transfer of one month’s salary, up to a limit of Rs 15,000, in three installments to first-time employees registered with the EPFO. The eligibility limit for this scheme will be Rs 1 lakh per month. Sitharaman projected that the scheme would benefit 2.10 crore youths.
Scheme B: Job Creation in Manufacturing This scheme aims to incentivize additional employment in the manufacturing sector linked to the employment of first-time employees. An incentive will be provided at a specified scale directly to the employee as well as the employer with respect to EPFO contributions during the first four years of employment. The government expects this scheme to benefit 30 lakh youths and their employers.
Scheme C: Support to Employers This employer-focused scheme will cover additional employment in all sectors. All additional employment within a salary limit of Rs 1 lakh per month will be covered under the scheme. The government will reimburse employers up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee. The scheme aims to incentivize the employment of an additional 50 lakh persons, the Finance Minister said.
