Union Budget 2024-25: New Employment Schemes to Boost Job Creation

On July 23, 2024, Finance Minister Nirmala Sitharaman presented the Union Budget for 2024-2025 in Parliament, unveiling several schemes and initiatives to enhance the country's overall economic condition. Amidst these, three employment schemes got special attention. These schemes are meant for first-time job seekers, supporting employers and boosting job creation in the Manufacturing sector.

The Finance Minister highlighted nine key budget priorities, with employment and skills development being the second priority. She then detailed three significant employment-linked incentives under the Prime Minister's package. Without further ado, in this post, let’s find out everything related to these schemes and see how they can be helpful.

Scheme 1: One-month Wage Subsidy for Individuals Entering the Workforce

The One-month Wage Subsidy scheme, introduced in the Union Budget 2024-25, is designed to support individuals entering the workforce for the first time. This scheme aims to ease the financial burden on new employees and encourage their participation in the formal job Market.

The subsidy will be provided through a direct benefit transfer of the first month's salary, distributed in three installments, up to ₹15,000. This scheme is available to those registered with the Employees’ Provident Fund Organisation (EPFO), with eligible employees potentially receiving up to ₹1 lakh per month in salary. Sitharaman mentioned that the scheme will benefit up to 10 lakh young individuals.

Key Features

Here are some key features of this scheme to note:

• It applies to individuals who are newly registered with the EPFO.
• The scheme provides a wage subsidy equivalent to one month's salary.
• The subsidy will be paid in three installments, with a maximum amount of ₹15,000.
• The scheme applies to employees earning up to ₹1 lakh per month.
• A direct benefit transfer system will directly transfer the subsidy to the employees’ accounts.

Scheme 2: Incentivising the Hiring of First-time Employees

The Incentivising the hiring of first-time Employees scheme, presented in the Union Budget 2024-25, aims to boost job creation in the manufacturing sector by providing financial incentives for hiring first-time employees.

Incentives will be offered to employees and employers, based on their EPFO contributions, during the first four years of employment. The Finance Minister indicated the scheme will benefit 30 lakh first-time employees and their employers. This scheme is part of a broader effort to enhance employment opportunities and stimulate Economic Growth.

Key Features

Here are some key features of this scheme to note:

• The scheme targets employers in the manufacturing sector who hire first-time employees.
• It focuses on employees who are newly registered with the EPFO.
• Incentives will be provided to both employees and employers.
• The incentives are based on their EPFO contributions.
• The incentive period covers the first four years of employment.
• The scheme's primary objective is to encourage the manufacturing sector to create additional jobs by making it financially attractive to hire new, first-time employees.
• The scheme aims to stimulate job growth and support economic development by reducing the cost of hiring new employees.

Scheme 3: Supporting Employers by Subsidising Additional Employment

This initiative aims to support employers by subsidising additional employment across various sectors. It covers new hires with salaries up to ₹1 lakh per month. The government will reimburse employers up to ₹3,000 per month for two years for their EPFO contributions for each additional employee. Sitharaman noted that this scheme is intended to encourage hiring 50 lakh additional workers.

Key Features

Here are some key features of this scheme to note:

• The scheme is available to employers across all sectors who hire additional employees.
• It targets explicitly new hires with salaries up to ₹1 lakh per month.
• The government will reimburse employers up to ₹3,000 per month for their EPFO contributions for each additional employee.
• This reimbursement will be provided for two years.
• The subsidy will be directly transferred to the employers' accounts based on the additional employees hired and their EPFO contributions.
• The scheme's primary objective is to reduce employers' financial burden when hiring new employees.

Conclusion

The Union Budget 2024-2025 introduced several initiatives to boost the country’s economic condition, focusing on employment and skills development. Among these were three standout schemes aimed at first-time job seekers, supporting employers, and promoting job creation in the manufacturing sector.

These schemes offer a financial cushion for new employees, target the manufacturing sector, provide incentives to employees and employers and extend support across all industries. These schemes highlight the government’s commitment to creating employment opportunities, supporting employers, and stimulating economic growth. By targeting key areas of job creation and reducing financial barriers, the Union Budget 2024-2025 aims to foster a more inclusive and robust job market, contributing to the country's overall economic development.