The Indian government has announced a comprehensive package aimed at boosting employment opportunities under its ‘Employment Linked Incentive’ initiative. This package, part of the Prime Minister’s larger economic plan, focuses on supporting both new entrants to the workforce and businesses.
Scheme A: A Boost for First-Time Job Seekers
To encourage young people to enter the formal workforce, the government will provide a one-time financial incentive to new employees across all formal sectors. Under this scheme, eligible individuals will receive a direct benefit transfer equivalent to one month’s salary, distributed in three installments.
- Eligibility: Individuals who are newly employed in the formal sector and registered with the Employees’ Provident Fund Organization (EPFO) will be eligible.
- Benefit: A maximum of Rs 15,000 will be provided to eligible employees, with a salary cap of Rs 1 lakh per month.
- Impact: The government anticipates that this scheme will benefit a substantial 210 lakh young people.
Scheme B: Incentivizing Job Creation in Manufacturing
To stimulate job growth in the manufacturing sector, the government will offer incentives to both employers and employees. The scheme is designed to encourage the hiring of new employees and retain existing ones.
- Focus: The scheme will target the manufacturing sector and incentivize the employment of first-time workers.
- Incentives: Both employees and employers will receive incentives based on their EPFO contributions during the initial four years of employment.
- Impact: The government expects this scheme to create employment opportunities for approximately 30 lakh youth.
Scheme C: Supporting Employers for Job Creation
To encourage businesses to hire more employees, the government will provide financial support to employers across all sectors. This incentive is aimed at offsetting the cost of hiring additional staff.
- Eligibility: Employers who create new jobs with a monthly salary of up to Rs 1 lakh will be eligible.
- Benefit: The government will reimburse employers up to Rs 3,000 per month for two years for each new employee’s EPFO contribution.
- Impact: It is estimated that this scheme will incentivize the creation of 50 lakh new jobs.
Participation of women in the workforce
We will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.
Skilling programme
I am happy to announce a new centrally sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs.
Skilling Loans
The Model Skill Loan Scheme will be revised to facilitate loans up to Rs 7.5 lakh with a guarantee from a government promoted Fund. This measure is expected to help 25,000 students every year.
Education Loans
For helping our youth who have not been eligible for any benefit under government schemes and policies, I am happy to announce a financial support for loans upto Rs 10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount
Overall, the government’s ‘Employment Linked Incentive’ package represents a significant investment in job creation and youth empowerment. By providing direct financial support to both employees and employers, the government aims to stimulate economic growth and create a more inclusive job market.
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