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(GIST OF KURUKSHETRA) Budget 2024-25: A Roadmap to Develop an Industry ready Workforce

(SEPTEMBER-2024)

Budget 2024-25: A Roadmap to Develop an Industry ready Workforce

Context:

The Economic Survey 2023-24 notes that Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce. India’s workforce, as per estimates for 2022-23, was nearly 56.5 crore.

Prime Minister’s Package: Boost to Skilling

As part of the Prime Minister’s package, five key schemes and initiatives have been announced, supported by a massive Central Government outlay of Rs. 2 lakh crore. The entire package will facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period and upgrade 1,000 Industrial Training Institutes (ITIs).
These initiatives aim at Employment Linked Incentives besides enhancing skilling, women’s workforce participation, support to MSMEs and strengthening capital infrastructure, collectively driving a significant positive impact on the nation’s employment scenario.
The focus is on outcome and quality of skilling, with course content and design aligned to the needs of the industry. The ITIs would be upgraded in a hub-and-spoke arrangement after redesigning and reviewing the existing courses.
The Budget has also announced internship opportunities to one crore youth in 500 top companies over the next five years, with an internship allowance of Rs. 5,000 per month and a one-time assistance of Rs. 6,000, thus providing exposure to real-life business and professional environments. The three employment-linked incentive schemes aim to encourage formal sector employment with incentives for employers to hire and employees to upskill.

Model Skill Loan Scheme

Model Skill Loan Scheme will be revised to facilitate loans up to Rs. 7.5 lakh with Government-backed guarantees, benefiting 25,000 students annually. For those ineligible for existing schemes, financial support for loans up to Rs. 10 lakh for higher education in domestic institutions will be provided, with e-vouchers offering annual interest subvention of 3 percent for 1 lakh students each year.

Focus on Informal Workforce

The Budget also amplifies initiatives like PM Vishwakarma, PM SVANidhi, National Livelihood Mission, and Stand-Up India, empowering craftsmen, artisans, self-help groups, SC/ST and women entrepreneurs, and street vendors, which will create jobs and boost local economies.
It has envisioned a better business environment and facilities for the street vendors in urban areas wherein Indian Street Market will be set up under the PM SVANidhi Scheme.
The Government has announced in this budget a new scheme to support the development of 100 weekly ‘haats’ or street food hubs in select cities for the next five years.
This scheme, which draws from the success of the PM Svanidhi Scheme, aims at bringing in a transformative change in the lives of the street vendors by providing spaces for businesses.
Most of the street vendors in the bigger cities are actually migrants from smaller towns, and this will help ensure more stable incomes and higher remittances to their villages and towns.

PM Vishwakarma Scheme

The PM Vishwakarma Scheme plays an important role when it comes to rural employment. Focussed on artisans and craftspeople who make up the bulk of the informal workforce, it has the potential to help raise incomes in the non-farm sector.
The budgetary outlay for the PM Vishwakarma scheme has been raised to Rs. 4,824 crore for FY25 against Rs. 990 crore in FY24, a spike of 387.3 percent. The financial outlay for the scheme from FY 2023-2024 to FY 2027-28 is Rs. 13,000 crore.
The increased allocation attempts to foster significantly higher employment of the informal workforce, especially in rural India, indirectly ensuring better remuneration for skilled people in the non-farm sector.

Labour Welfare Initiatives

The Budget also introduces major reforms for labour welfare, including the comprehensive integration of E-shram portals with other platforms, facilitating a one-stop solution for skill requirements, job roles, and connecting job aspirants with potential employers and skill providers.
This will strongly facilitate establishing e-Shram as a one-stop solution for labour welfare, employment, skilling, etc. The revamping of the Shram Suvidha and Samadhan portals will streamline industry compliance processes and enhance the grievance redressal mechanisms for workers respectively.

Way forward:

This is perhaps the first time that the private sector is at the centre of the Government’s job creation initiatives. The direct benefit transfer of one month’s salary in three instalments to first-time employees, as registered in the EPFO, incentivises the formal sector to step up hiring.
Just as production linked incentives have given a boost to sectors such as electronics, telecom or IT hardware, employment based incentives have the power to transform the broader manufacturing sector, making it not just an economic powerhouse but also a job creator.
While the employability of India’s youth has risen in the last decade – growing from below 34 percent in 2014 to over 51 percent in 2024 -- there is still a lot of work to be done. The PM’s package on employment and skilling has the potential to make this happen. It now depends on the private sector and the Government to come together to make this a reality.