Amendment in Prime Minister’s Package for Employment and Skilling Coverage and Estimated Central Outlay under Budget 2024-2025

*Starting from third year

Outline of Schemes

1. Employment Linked Incentive Scheme A: First Timers (Para 20)

• One month’s wage as subsidy (maximum Rs. 15,000)
• Applicable to all sectors
• First timers have a learning curve before they become fully productive; subsidy is to assist employees and employers in hiring of first timers.
• Applicable to all persons newly entering the workforce (EPFO) with wage/salary less than Rs. 1 lakh per month.
• Subsidy will be paid to the employee in three instalments
• Employee must undergo compulsory online Financial Literacy course before claiming the second instalment.
• Subsidy to be refunded by employer if the employment to the first timer ends within 12 months of recruitment.
• Expected to cover approximately one crore persons per annum.
• Scheme will be for 2 years

2. Employment linked Incentive Scheme B: Job creation in manufacturing (Para 21)

• Applicable for substantial hiring of first time employees in the manufacturing sector
• All employers which are corporate entities and those non-corporate entities with a three year track record of EPFO contribution will be eligible.
• Employer must hire at least the following number of previously non-EPFO enrolled workers:
• 50 or
• 25% of the baseline (previous year’s number of EPFO employees) [whichever is lower]
• Incentive will be paid for four years partly to the employee and partly to the employer as follows:

• Employer must maintain threshold level of enhanced employment throughout, failing which subsidy benefit will stop.
• Employee must be directly working in the entity paying salary/wage (i.e. in-sourced employee).
• Employees with a wage/ salary of up to Rs. 1 lakh per month will be eligible, subject to contribution to EPFO.
• For those with wages/salary greater than Rs. 25,000/month, incentive will be calculated at Rs. 25,000/month.
• Subsidy to be refunded by employer if the employment to first timer ends within 12 months of recruitment.
• This subsidy will be in addition to benefit under Part-A
• Scheme will be for 2 years

3. Employment Linked Incentive Scheme C: Support to employers (Para 22)

• Applicable to an employer who:
• Increases employment above the baseline (previous year’s number of EPFO employees) by at least two employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) and sustains the higher level, and
• For employees whose salary does not exceed Rs. 1,00,000/month
• New employees under this Part need not be new entrants to EPFO
• For two years Government will reimburse EPFO employer contribution [up to] Rs. 3,000/month to the Employer for the additional Employees hired in the previous year.
• If the employer creates more than 1000 jobs:
• Reimbursement will be done quarterly for the previous quarter
• Subsidy will continue for the 3rd and 4th year on the same scale as Employer benefit in Part-B
• Not applicable for those Employees covered under Part-B.
• This subsidy will be in addition to benefit under Part-A.
• Scheme will be for 2 years

4. Skilling Programme and Upgradation of Industrial Training Institutes (Para 24)

• 1000 Industrial Training Institutes (ITIs) to be upgraded in hub and spoke arrangements in five years
• New Centrally Sponsored Scheme in collaboration with states and industry
• Focus on outcome and quality of skilling
• Course content and design aligned to needs of industry
• Total outlay of Rs. 60,000 crore over five years
• Government of India—Rs. 30,000 crore
• State Governments—Rs. 20,000 crore
• Industry—Rs. 10,000 crore (including CSR funding)
• 200 hubs and 800 spoke ITIs –all with industry collaboration
• Re-design and review of existing courses
• New courses
• 1 to 2 year courses in all 1000 ITIs
• Short term specialised courses in Hub ITIs
• Capacity augmentation of 5 national institutes for training of trainers
• 20 lakh students expected to benefit

5. Internship in Top Companies (Para 51)

• One crore youth to be skilled by India’s top companies in five years.
• Twelve months Prime Minister’s Internship with monthly allowance of Rs. 5,000
• Applicable to those who are not employed and not engaged in full time education.
• Youth aged between 21 and 24 will be eligible to apply.
• Cost sharing (per annum):
• Government – Rs. 54,000 towards monthly allowance (plus Rs. 6,000 grant for incidentals)
• Company – Rs 6,000 from CSR funds towards monthly allowance
• Training cost to be borne by the Company from CSR funds.
• Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure)
• Participation of companies is voluntary
• Applications through an online portal
• Company to select from a short list; short listing based on objective criteria with emphasis on those with lower employability
• Ineligible candidates (indicative list)
• Candidate has IIT, IIM, IISER, CA, CMA etc as qualification
• Any member of the family is assessed to Income Tax
• Any member of the family is a government employee, etc.
• Company is expected to provide the person an actual working experience on a skill in which the company is directly involved.
• At least half the time should be in actual working experience/job environment, not in classroom.
• In case the Company cannot directly do so, it must tie-up with:
• Companies in its forward and backward supply chain (e.g. suppliers or customers) or
• Other Companies/Institutions in its Group or otherwise
• Will be co-ordinated with State Government initiatives wherever applicable.
• Phase 1 of the scheme will be for 2 years followed by Phase 2 for 3 years

Note: Details of the schemes are subject to modification during the process of appraisal and approval.