Government Aims to Implement Employment-Linked Incentive Schemes by Year-End
The Indian government is actively working towards launching the employment-linked incentive schemes announced in the Union Budget 2024-25 by the end of 2024. These schemes are designed to boost job creation in the formal sector.
Labour Secretary Sumita Dawra confirmed that the government is finalizing the operational aspects and obtaining necessary approvals. "We are already working on the schemes and should be ready with the draft in a few weeks," she stated. The draft will then undergo inter-ministerial consultations, followed by approval from the Expenditure Finance Committee and the Union Cabinet.
The Union Budget 2024-25 introduced three Employment Linked Incentive schemes under the Prime Minister's Package. These schemes aim to encourage formal sector employment by providing incentives based on EPFO enrollment, recognizing first-time employees, and supporting both employees and employers.
One scheme targets first-time employees registered with EPFO, offering a one-month wage (up to Rs 15,000) in three installments. Another scheme incentivizes additional employment in the manufacturing sector, particularly for first-time job seekers, through contributions to the EPFO. The third scheme focuses on employers, covering additional employment across all sectors.
The Labour Secretary highlighted the advantage of leveraging the existing EPFO infrastructure for these schemes. "The strength is that EPFO is already doing this kind of work and so it aligns with its existing work," she explained.
However, certain aspects still require attention, such as implementing Direct Benefit Transfer payments for Scheme A, which necessitates IT system adjustments. "We are working out the requirements of software and hardware," Dawra said, adding that the EPFO is already upgrading its systems.
The government has allocated Rs 10,000 crore for these schemes in the current fiscal year. Combined with other skilling and on-the-job training initiatives, these schemes are projected to create skilling and employment opportunities for 4.1 crore youth over five years.