FM Announces 3 Job Linked Incentive Schemes: Who Will Benefits?

In the Union Budget for 2024-25, the Finance Minister introduced three new incentive programs designed to enhance job creation in the manufacturing and formal sectors. These schemes, part of the Prime Minister's Budget package will be linked to the Employees Provident Fund Organisation or EPFO. They are designed to encourage the hiring of first-time employees and provide support to both workers and employers.

The Finance Minister revealed a new initiative included in the Prime Minister's Budget package which aims to offer internship opportunities to 10 million young individuals over the next five years in 500 leading companies. This program will allow young people to gain practical experience in real business environments, explore different professions and discover employment opportunities for a year. Each intern will receive a monthly stipend of ₹5,000 and a one time allowance of ₹6,000. Companies will cover the training costs and contribute 10% of the internship expenses using their Corporate Social Responsibility or CSR funds.

Here are the benefits of this package:

Scheme A: For First Times

Scheme A is designed to help young people who are starting their first job in any sector. Under this scheme, first time employees who are registered with the Employee’s Provident Fund Organisation or EPFO will receive one month's salary directly from the government. The payment which can total up to ₹15,000 will be distributed in three separate installments. To qualify an employee's monthly salary must be below ₹1 lakh. Scheme A is designed to assist around 21 million young individuals who are starting their careers.

Scheme B: Job Creation In Manufacturing

This scheme aims to encourage more jobs in the manufacturing sector by offering incentives for hiring first time employees. Both the new employees and their employers will receive financial benefits related to their contributions to the Employee Provident Fund Organization or EPFO during the first four years of employment. The government hopes this initiative will support 30 lakh young people and their employers making it easier for businesses to grow and for new workers to find jobs.

Scheme C: Support To Employers

Finance Minister announced a new initiative to boost employment by providing financial incentives to employers. For every additional employee earning up to ₹1 lakh per month the government will reimburse up to ₹3,000 per month towards the employer's contribution to Employee Provident Fund or EPF for two years. This scheme aims to create 50 lakh new jobs.

Additionally, the government plans to set up hostels for working women across the country to encourage more women to join the workforce. To support agriculture the government will fund private companies, experts and others to develop seeds that can withstand climate change.

For comparison, there's an existing scheme MGNREGA or Mahatma Gandhi National Rural Employment Guarantee Act which provides 100 days of wage employment per year to at least one adult member of every household seeking manual work.

Final Words

In the Union Budget 2024-25, the main focus was on creating jobs, improving skills and supporting small and medium sized enterprises. Budget aims to generate opportunities for everyone through nine key priorities. These include enhancing productivity and resilience in agriculture, boosting manufacturing and services sectors and investing in infrastructure. There will be a strong emphasis on employment and skill development, urban development and promoting innovation, research and development. Additionally, the Budget prioritized inclusive human resources development and social justice, ensuring energy security, and implementing next generation reforms to drive overall growth and progress.