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

  Enrolment Duration Expenditure Duration Beneficiaries Central Outlay
  Years (lakhs) (Rs. Crore)
Employment Linked Incentive        
Scheme A (first timers) 2 3 210 23,000
Scheme B (bulk hiring of first timers in manufacturing) 2 6 30 52,000
Scheme C (job creation) 2 6 50 32,000
Internship Programme (Phase-1) 2 3 30 19,000
Internship Programme (Phase-2) 3* 4* 70 44,000
Upgradation of ITIs N/A 5 20 30,000
Total 410 2,00,000

*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:
See also  Provisions and Amendments Relating to “Widening and Deepening of Tax Base and Anti-Avoidance” under Finance (No.2) Bill, 2024.
Year Incentive (as % of wage / salary, shared equally between employer & employee)
1 24
2 24
3 16
4 8
  • 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
See also  Provisions and Amendments Relating to “Basic Excise Duty” under Finance (No.2) Bill, 2024.

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
See also  Provisions and Amendments Relating to “Simplification and Rationalisation” under Finance (No.2) Bill, 2024.

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

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