The Modi 3.0 Government used the Budget presentation to unveil a whopping ₹2-lakh crore ($24 billion) spending plan for job creation and skilling for 4.1 crore youth in the next five years. The Budget has made a provision of ₹1.48 lakh crore for education, employment and skilling in the current year.

This proposed $24-billion spend is related to the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for these youth. The PM package of five schemes includes three employment-linked incentives-based schemes.

The three schemes will be based on enrolment in the Employee Provident Fund Organisation (EPFO), and focus on recognition of first-time employees, and support to employees and employers, Sitharaman said. 

Scheme A: First Timers

The Finance Minister said the scheme would provide one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one-month salary in three instalments to first-time employees, as registered in the EPFO, will be up to ₹15,000. The eligibility limit will be a salary of ₹1 lakh per month. The scheme is expected to benefit 210 lakh youth, she said.

Scheme B: Job Creation in manufacturing

This scheme will incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees. An incentive will be provided at a specified scale directly, both to the employee and the employer with respect to their EPFO contributions in the first four years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers, she added.

Scheme C: Support to employers

This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary of ₹1 lakh per month will be counted. The government will reimburse employers up to ₹3,000 per month for two years towards their EPFO contribution for each additional employee. The scheme is expected to incentivise additional employment of 50 lakh persons, she added.

Skilling Scheme 

Sitharaman announced a new centrally sponsored scheme on skilling, as the fourth scheme under the Prime Minister’s package for skilling in collaboration with state governments and Industry. About 20 lakh youth will be skilled over a five-year period.

As many as 1,000 Industrial Training Institutes will be upgraded in hub-and-spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs, Sitharaman added.

She also announced that the Model Skill Loan Scheme will be revised to facilitate loans up to ₹7.5 lakh, with a guarantee from a government promoted fund. This measure is expected to help 25,000 students annually.

Education loans

To help youth who are not eligible for any benefit under government schemes and policies, Sitharaman announced financial support for loans up to ₹10 lakh for higher education in domestic institutions. 

“E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount,” she added.

The Finance Minister also introduced a new internship programme, enabling companies to employ interns at ₹5,000 per month for a year. This would be funded through corporate social responsibility (CSR) funds and the initiative aims to skill 10 million youth over five years. 

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