New Delhi: Union finance minister Nirmala Sitharaman in the Bharatiya Janata Party(BJP)-led National Democratic Alliance (NDA) government’s first budget after the 2024 Lok Sabha elections has announced measures to boost jobs and employment, in an echo to the poll campaign in which unemployment among the youth emerged as a major issue.
In its bid to boost unemployment, the Union budget 2024-25 has found apparent inspiration from the Congress’ 2024 Lok Sabha election manifesto that promised an apprenticeship programme, by promising internships in top companies, three schemes for ‘Employment Linked Incentive’ under the Prime Minister’s Package for Employment and Skilling as well as the abolition of Angel Tax to boost employment and investment.
In her budget speech on Tuesday (July 23), Sitharaman announced that in order to provide measures for promotion of manufacturing and services, the Union government will provide internships in top companies.
“Our government will launch a scheme to provide internship opportunities in 500 top companies to 1 crore youth. They will get exposure to business and employment opportunities. Internship allowance of Rs 5,000 per month and one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the expenses of the training cost and 10% of their internship cost from their CSR funds,” said Sitharaman while presenting the Union budget 2024-25 in the Lok Sabha.
The Congress manifesto had stated a similar promise under a new “Right to Apprenticeship Act”.
“The Right to Apprenticeship Act to provide a one year apprenticeship with a private or a public sector company to every diploma holder or college graduate below the age of 25. Apprentices will get Rs 1 lakh a year. The apprenticeship will impart skills, enhance employability and provide full-time job opportunities for millions of youth,” the manifesto said.
Employment-linked incentive
Additionally, the Union government announced three schemes for ‘Employment Linked Incentive’ under the Prime Minister’s Package for Employment and Skilling.
The Congress’ manifesto too had promised employment-linked incentive (ELI) under its promises to meet widespread unemployment.
Sitharaman said that three schemes for ‘Employment Linked Incentive’ under the Prime Minister’s Package for Employment and Skilling includes; Scheme A aimed at First Timers, Scheme B for Job Creation in manufacturing and Scheme C as Support to employers.
“One month wage to all persons newly entering the workplace in all formal sectors. Direct benefit transfer of one month salary in 3 instalments to first-time employees as registered in the EPFO will be up to Rs 15,000. The eligibility limit will be a salary of Rs 1 lakh per month. The scheme will benefit 210 lakh youth,” said Sitharaman referring to the scheme A for first timers.
“Scheme B job creation in manufacturing..this scheme will incentivise additional employment in the manufacturing sector linked to the employment of first time employees. Incentive will be provided at specified stages directly both to employee and employer with respect to their EPF contribution in the first four years of employment. The scheme is expected to benefit 30 lakh youth entering employment and their employers.”
The finance minister said that Scheme C will focus on employers and will cover “additional employment in all sectors.”
“All additional employment within a salary of Rs 1 lakh per month will be counted. The government will reimburse upto Rs 3,000 per month for two years towards EPFO for each additional employee. The scheme is expected to incentivise additional employment of upto 50 lakh persons,” she said.
The Congress in its manifesto while referring to ELI scheme said that it would “create a new employment-linked incentive Scheme for corporates to win tax credits for additional hiring against regular, quality jobs.”
Abolition of Angel Tax
Sitharaman also announced that the government will abolish the Angel Tax in a bid to promote investment and foster employment.
“To bolster the Indian start-up ecosystem, support innovation, I propose to abolish the so-called Angel tax for all classes of investors,” she said.
The abolition of the Angel Tax also featured in the Congress manifesto.
“We will eliminate “Angel tax” and all other exploitative tax schemes that inhibit investment in new micro, small companies and innovative start-ups,” the manifesto said.
Congress manifesto ‘copy’
Former finance minister and Congress MP P. Chidambaram who had headed the Congress’ manifesto committee said that he was glad that the finance minister had read the Congress manifesto after the elections but wished she had “copied some other ideas.”
“I am glad to know that the Hon’ble FM has read the Congress Manifesto LS 2024 after the election results. I am happy she has virtually adopted the Employment-linked incentive (ELI) outlined on page 30 of the Congress Manifesto. I am also happy that she has introduced the Apprenticeship scheme along with an allowance to every apprentice spelt out on page 11 of the Congress Manifesto,” he said.
“I wish the FM had copied some other ideas in the Congress Manifesto. I shall shortly list the missed opportunities.”
Congress MP Jairam Ramesh said that Sitharaman had “taken a leaf out of the INC’s Nyay Patra 2024, with its internship program clearly modelled on the INC’s proposed Apprenticeship Program that was called Pehli Naukri Pakki.”
The Finance Minister has taken a leaf out of the INC’s Nyay Patra 2024, with its internship program clearly modelled on the INC’s proposed Apprenticeship Program that was called Pehli Naukri Pakki.
However, in their trademark style, the scheme has been designed to grab… pic.twitter.com/1viGt9rgfg
— Jairam Ramesh (@Jairam_Ramesh) July 23, 2024
“However, in their trademark style, the scheme has been designed to grab headlines, with arbitrary targets (1 crore internships) rather than a programmatic guarantee for all diploma holders and graduates, like the Indian National Congress had envisioned.”
While the budget echoes the Congress’ promises, following the release of the manifesto in April, Sitharaman had said that the Congress’ promises were unimplementable.
“The promises made by the Congress in their manifesto are un-implementable and there will be budget deficit. There would be lack of funds to implement those,” she had said.
