The Union Budget 2024 has introduced Scheme B to stimulate job creation in the manufacturing sector. FM Nirmala Sitharaman said the scheme offers incentives linked to the employment of first-time employees, focusing on EPFO contributions for the first four years of employment.
The initiative is expected to benefit 30 lakh youths and their employers. This will look to encourage the growth of the manufacturing industry and helping young workers secure stable employment in a critical sector of the economy.
“The Finance Minister's new scheme to boost job creation in the manufacturing sector by linking it to the employment of first-time workers is a significant step forward. Offering incentives for EPFO contributions to both employees and employers for the first four years, this initiative is expected to benefit 3 million young people and create additional employment across all sectors,” said Munira Loliwala, VP- Strategy and Growth, TeamLease Digital.
According to the Economic Survey 2023-24, 11.4 per cent of India’s workforce is employed in the manufacturing sector. “[..] the manufacturing sector employment creation has been subdued in the past decade due to the legacy of bad loans and appears to have rebounded since 2021-22,” Economic Survey 2024 had noted.
“Additionally, the PM scheme to provide internship opportunities in 500 top companies to 1 crore youth over the next five years will further enhance skill development. Given the manufacturing sector's pivotal role in the economy, these initiatives will help cultivate a diverse, productive, and highly skilled workforce,” Loliwala added.
The Budget also introduced new centrally sponsored skilling scheme to enhance the skills of 20 lakh youth over a five-year period. The programme will upgrade 1,000 industrial training institutes (ITIs) in a hub-and-spoke model, aligning course content with industry needs and introducing new courses for emerging sectors.
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