Rs 7.5 Lakh Skill Loans For 25K Students, 210 Lakh Youths To Benefit From New Employment Scheme

Finance Minister Nirmala Sitharaman on Tuesday revealed a series of employment and skilling initiatives under ‘Priority Two’ of the Union Budget 2024. These measures are aimed at supporting first-time employees, incentivise job creation in the manufacturing sector, and enhance participation of women in the workforce, alongside comprehensive skilling programmes.

Scheme A: First Timers

The government has introduced Scheme A to financially support individuals entering the formal workforce for the first time. “This scheme will provide one month wage to all persons newly entering the workforce in all formal sectors,” said Sitharaman. 

The initiative includes a direct benefit transfer of one month’s salary in three installments, capped at Rs 15,000 per employee. The eligibility criterion is a monthly salary of up to Rs 1 lakh and the scheme is expected to benefit 210 lakh youths.

Scheme B: Job Creation In Manufacturing

To stimulate employment in the manufacturing sector, Scheme B has been launched. This scheme will try to incentivise additional employment linked to the hiring of first-time employees. “An incentive will be provided at a specified scale directly both to the employee and the employer with respect to the EPFO contribution,” mentioned Sitharaman. 

This incentive will be available for the first four years of employment, benefiting an estimated 30 lakh youth and their employers.

Scheme C: Support To Employers

Scheme C will focus on providing support to employers across all sectors to encourage additional hiring. The government will reimburse employers up to Rs 3,000 per month for two years towards the EPFO contribution for each additional employee. 

“This employer focus scheme will cover additional employment in all sectors,” said the FM. The scheme is expected to incentivise the employment of 50 lakh additional persons.

Women’s Participation In the Workforce

The Finance Minister also announced initiatives to facilitate higher participation of women in the workforce. These measures include setting up working women hostels in collaboration with industry and establishing crèches. Additionally, there will be women-specific skill programmes and promotion of market access for Women Self Help Group (SHG) Enterprises.

Skilling Programme

A new centrally sponsored scheme has been introduced to enhance skilling initiatives in collaboration with state governments and industry. “I’m happy to announce a new centrally sponsored scheme as the fourth scheme under the Prime Minister’s package for skilling and collaboration with state governments and industry,” said Sitharaman. 

The programme will look to skill 20 lakh youth over five years and upgrade 1,000 industrial training institutes in hub-and-spoke arrangements. The course content and design will be aligned with industry needs, and new courses will be introduced for emerging sectors.

Skilling Loans

To facilitate access to financial resources for skill development, the “Model Skill Loan Scheme” has been revised. The scheme will now provide loans up to Rs 7.5 lakh, guaranteed by a government-promoted fund. This is expected to benefit 25,000 students annually.

Industry Reaction

TeamLease Degree Apprenticeship CEO Ramesh Alluri Reddy has praised the budget’s focus on skill development, calling it a transformative move for India’s job market. “With over 4 crore jobs for youth set to be created over five years under five schemes with an outlay of Rs 2 lakh crore, the government’s initiative is poised to transform the workforce,” he said.

Reddy lauded the Rs 1.48 lakh crore allocation for education, employment and skilling. “A provision of Rs 1.48 lakh crore has been made for education, employment, and skilling, highlighting a robust commitment to addressing the skills gap and improving employability. The introduction of a new central scheme to skill 20 lakh youth over a five-year period is particularly noteworthy.”

Meanwhile, Dr Maithili Tambe, CEO of The Academy School (TAS) in Pune, commended the budget’s Rs 3 lakh crore allocation dedicated to girls and women. “It will aid by funding scholarships, building girl-centric schools, and establishing mentorship programs that inspire young women to pursue careers in fields traditionally dominated by men, such as science, technology, engineering, and mathematics (STEM),” she said.