Job creation gets Budget boost with incentives

Recognising job creation for the youth as the foremost challenge for the economy, Finance Minister Nirmala Sitharaman on Tuesday announced a comprehensive Prime Minister's package to facilitate the employment and skilling of 41 million youth with a central outlay of ₹2 trillion over the next five-year period.

- SHIVA RAJORA

The package will consist of five schemes and initiatives three focused on jobs and two on skilling.

― "Our government will implement the following three schemes for employment-linked incentive (ELI), as part of the Prime Minister's package," Sitharaman said in her Budget speech. "These will be based on enrolment in the employment provident fund organisation (EPFO); and focus on recognition of first-time employees; and support to employees and employers."

The ELI scheme for firsttimers (i.e. persons entering the workforce in all formal sectors) will be implemented for two years and is expected to cover about 10 million people per annum with a total central outlay of ₹23,000. The scheme will include one month's wage as subsidy (up to ₹15,000) to the employee in three instalments for new people with wage/salary less than ₹1 lakh per month. To ensure retention, the employer will refund the subsidy if the employment of these first-timers ends within 12 months of recruitment.