Budget 2024: FM announces 3 schemes under employment-linked incentives

Union Budget 2024: Finance Minister Nirmala Sitharaman announced three employment-linked incentive schemes for employees and employers

While presenting the Union Budget 2024 in the Lok Sabha, Finance Minister Nirmala Sitharaman announced that three employment-linked incentive schemes will be launched, based on registration with the Employees' Provident Fund Organisation (EPFO), with a major focus on recognising first-time employees.

Under this, the first scheme will provide a one-month salary subsidy to businesses hiring employees for the first time. Through the Direct Benefit Transfer (DBT) system, eligible recipients will receive a payment of up to Rs 15,000, distributed in three separate instalments.

"One month's wage will be given to all workers newly entering the work cycle. Rs 15,000 will be given to new entrants with a salary of up to Rs 1 lakh per month," the finance minister said.

The eligibility threshold will be set at Rs 1 lakh per month. The finance minister highlighted that this initiative will benefit 3 million young individuals entering the workforce and their employers.

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Additionally, the finance minister introduced a new scheme aimed at stimulating job creation in the manufacturing sector. This programme, which seeks to incentivise the hiring of first-time employees, will provide benefits related to EPFO contributions for the first four years of employment. The initiative is projected to support 3 million young people and create additional job opportunities across different industries.

Under the third scheme, employers will be eligible for a reimbursement of up to Rs 3,000 per month for each new hire’s EPFO contributions over a two-year span. The primary objective of this scheme is to recruit an extra 5 million individuals, thereby promoting economic growth and enhancing employment opportunities.

Additionally, the finance minister launched a new centrally-sponsored initiative aimed at training 2 million youth over the next five years. According to the minister, the model skilling loan scheme will be updated to offer loans up to Rs 7.5 lakh.

To enhance skilling efforts, as many as 1,000 industrial training institutes (ITIs) will be modernised following a hub-and-spoke model. Additionally, financial assistance will be provided for loans up to Rs 10 lakh to support higher education within domestic institutions.

Nirmala Sitharaman emphasised that this new scheme, developed in partnership with states and industry, will equip 2 million young individuals over the next five years.