Amid the increasing unemployment rate, and job and wage losses, the first Budget of the third Narendra Modi government has proposed taking a prioritised approach in the fields of employment and skilling. The Union Budget has proposed five schemes with an outlay of ₹2 lakh crore to generate jobs for the youth.

Union Finance Minister Nirmala Sitharaman said the Centre will implement three schemes for ‘Employment Linked Incentive’ as part of the Prime Minister’s package. “These will be based on enrolment in the Employees’ Provident Fund Organisation (EPFO), and focus on recognition of first-time employees, and support to employees and employers,” she said.

The scheme will provide one-month wage to all newly employed workers in all formal sectors. “The direct benefit transfer of one-month salary in three instalments to first-time employees, as registered in the EPFO, will be up to ₹15,000. The eligibility limit will be a salary of ₹1 lakh per month,” she said, adding that it will benefit 210 lakh youth.

In 2016, the Ministry of Textiles announced a special package for the apparel sector to generate one crore jobs in three years. One of the features of the package was the government bearing the entire employer’s contribution of 12% under the EPFO for new employees earning less than ₹15,000 a month for the first three years. While some of the large-scale units did invest under the package, it did not benefit the small- and medium-scale manufacturers much. Chairman of the Southern India Mills’ Association S.K. Sundararaman said such schemes need consistency and should be implemented for a longer period to be successful. Industries need time to plan, invest, and generate jobs.

The second scheme proposed by Ms. Sitharaman will incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees with respect to their EPFO contribution in the first four years. “The scheme is expected to benefit 30 lakh youth entering employment, and their employers,” she said.

The third scheme will cover additional employment in all sectors and the government will reimburse employers up to ₹3,000 per month for two years towards their EPFO contribution for each additional employee. “The scheme is expected to incentivise additional employment of 50 lakh persons,” she said.

The fourth scheme is to skill 20 lakh youth over a five-year period. “A thousand Industrial Training Institutes will be upgraded in hub-and-spoke arrangements with outcome orientation,” she said.

Internship scheme

Under the fifth scheme, one crore youth will get internship opportunities for 12 months in 500 top companies in the next five years. The government will provide an internship allowance of ₹5,000 per month and a one-time assistance of ₹6,000. The companies will bear the training cost and 10% of the internship cost from their CSR funds.

Union Minister for Labour Mansukh Mandaviya said the five schemes are a testament to the Centre’s commitment to creating opportunities for 4.1 crore youth over the next five years with a central outlay of ₹2 lakh crore.

Trade union leader Amarjeet Kaur said the proposals are actually for ease of doing business and will help corporate houses. “There is no specific proposal for job creation, except that some sectors will be incentivised to enhance business, which the Finance Minister claims, would provide jobs. The focus is on skilling and not on jobs for millions who are already skilled but without jobs and engage themselves in any work temporarily or casually to earn for survival,” Ms. Kaur said.