Budget 2024: Govt plans employment-linked incentive scheme for job creation

Budget 2024: The proposed ELI scheme may offer tax relief and wage subsidies to companies for creating employment opportunities amid rising concerns over 'jobless growth'

In a bid to boost employment opportunities in the country, the government may announce an employment-linked incentive (ELI) scheme for companies in the upcoming Union Budget. The framework of the scheme, according to the Financial Express, would be similar to that of the production-linked incentive (PLI) scheme. However, the ELI scheme would only apply to a few labour-intensive sectors, including toys, textiles, apparel, furniture, tourism, and logistics, among others.

Incentives under the scheme might include tax relief to businesses for adding new workers and providing wage subsidies for any additional jobs created for a limited period. Non-financial incentives, such as reducing regulatory burdens and subsidising skill development programmes, could also be a part of the ambitious scheme. Not only the employment scenario, but the government also hopes to boost domestic production through the scheme.

The MSME (Micro, Small, and Medium Enterprises) sector, which employs over 60 per cent of the workforce in India, could be the focus of the scheme. The idea is to incentivise companies to expand their workforce and, in the process, increase production and exports.

This comes at a time when a ‘weakened’ Narendra Modi government is facing heat from the opposition on the issue of unemployment. Several experts have also flagged India’s ‘jobless growth’ under Prime Minister Narendra Modi.

Earlier this year, a study by the International Labour Organisation (ILO) revealed that the employment growth “was nearly negligible at 0.01 per cent”. The report added, “This was even worse than in the period between 2000 and 2012 when employment opportunities witnessed a 1.6 per cent growth.”