To pursue the next generation of economic reforms, Modi government needed popular support and hence Union Budget 2024-25 makes Agriculture, Employment, and Inclusive Development the top three priorities. The five other priority areas – Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation and R&D – are kept in between. Budget theme this year rests on five factors – Employment, skilling, MSMEs, and the Middle Class. “We will formulate an Economic Policy Framework to delineate the overarching approach to economic development and set the scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth,” Finance Minister Nirmala Sitharaman said in her budget speech.

While describing the India’s economic growth as a “shining exception” the budget tries appear as focusing on job creation to address the severe job crisis in the country. The Economic Survey 2023-24 has already warned that the world of work is likely to change and may impact all workers irrespective of their skill levels.

For employment generation and to encourage larger women participation in the workforce and economy, women led units are announced considerable support, and setting up hostels and creating partnerships to organize women-specific skilling programmes. Credit guarantee scheme for MSMEs is extended. An increase in Mudra loan limit has been announced from the current Rs10 lakh to Rs20 lakh for those who have taken and successfully repaid loans under the TARUN category.

Finance Minister has announced a scheme to boost job creation in the manufacturing sector by linking it to the employment of first-time workers. This scheme will offer incentive for EPFO contribution to both the employees and employers for the first four years of employment. It is considered important for creation of salaries quality formal jobs in the backdrop of informalization of jobs crisis that has gripped India. Over 90 per cent of the jobs are presently in informal sector and most of them are poor quality jobs as far as social security is concerned. The new scheme is expected to benefit 3 million young people and will cover additional employment across all sectors. Further, there is a provision of reimbursement for employers up to Rs3,000 per month for two years for each additional employee’s EPFO contribution. It aims to incentivize the employment of 5 million additional people.

“One month wage to all persons newly entering the workplace in all formal sectors. Direct Benefit Transfer of one month salary in 3 instalments for first-time employees as registered in the EPFO will be up to Rs15000. The eligibility limit will be a salary of Rs1 lakh per month. The scheme will benefit 210 lakh youth,” Union Finance Minister Nirmala Sitharaman has said.

To remove mismatch between skills and available jobs, and to boost employability, Union Finance Minister has announced a new centrally sponsored scheme for 20 lakh youth to be skilled over 5 years. Around 1000 ITIs to be upgrades with hub and spoke arrangement, and the course contest will be tailored to the needs of the industries, particularly the emerging sectors.

A revision of Model Skill Loan Scheme has been proposed to help 25,000 students every year. E-vouchers for loans upto Ra10 lakh for higher education in domestic institution are to be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of loan amount. All the three schemes for employment-linked incentives are part of the Prime Minister’s package. Ms Sitharaman announced the PM Package of five schemes to facilitate employment and skilling. There will be an allocation of Rs2 lakh crore for education, employment, and skilling which would benefit 4.1 crore youths over 5 years. Rs1.48 lakh crore has been allocated for the current financial year.

As the 5th scheme under the Prime Minister’s package, government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR funds.

Increasing the Capex has been long considered to create large number of jobs. However, one should not forget that despite raising Capex in the past, job generation has not been at the desired level because of deployment of technology even at labour intensive workplaces has eroded the job opportunity in large number, especially in infrastructure. Possible for this reason, Capex spend for the current financial year is kept unchanged at Rs11.1 lakh crore from the Interim Budget, and infrastructure spend at 3.4 per cent of GDP.

For purported farmer’s welfare introduction of 109 high-yielding climate resilient varieties of seeds is announced. Setting up of digital agriculture infrastructure, annual digital crop survey and mapping of farmers to their land parcels are announced to facilitate better credit risk assessment, and enhance formal credit penetration in agriculture. An outlay of Rs1.52 lakh crore is made for Agri-economy. It is thought a positive step to boost rural employment and welfare of the rural people. Rs2.66 lakh crore has been allocated for rural development including rural infrastructure.

Under the top third priority of Inclusive Human Resource Development and Social justice, Union Finance Minister has said, “For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities.”

However, to address the poverty and inequality, it just mentions the extension of Pradhan Mantri Garib Kalyan Anna Yojna (PMGKAY) for the next five years benefiting over 80 crore people. Since this scheme has already been announced last year, it is nothing new.

Nevertheless, she said that implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up.

Focus is given on Pradhan Mantri Awas Yojna (PMAY), which is not only a scheme related to people’s welfare, but it can also boost the industry sector, especially the cement. The budget has announced 3 crore additional houses for affordable housing to the citizens. A budget of Rs10 lakh crore has been earmarked, and the central government will provide aid amounting to Rs2 lakh crore, and subsidized rages will be offered for these housing projects.

For promoting women-led development, the budget carries an allocation of more than Rs3 lakh crore for schemes benefitting women and girls.

For improving the socio-economic condition of tribal communities, the budget announced to launch Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefiting 5 crore tribal people. (IPA Service)