Focus on Industry-Engaged Employment GenerationFocus on Industry-Engaged Employment Generation The Union Budget emphasizes industry-engaged employment generation, workforce development, and enhancing women’s participation in the labor market. It aims to deliver private sector-led research and innovation, industry-aligned courses, internships in leading companies, and transformation of ITIs to develop a skilled workforce. Economic Research and Budget Alignment The economic research and budget reflect India’s commitment to developing an industry-relevant workforce and reducing unemployment. The survey projects a decrease in the unemployment rate to 3.2% in 2022-23. Impact on Education, Skills Development, and Jobs Viksit Bharat by 2047 The Budget addresses the need to create 8 million jobs annually by 2036, prioritizing youth employment. It focuses on increasing women’s participation in the labor market, youth access to education and skills, and aligning education and skills with industry needs. Work-Related Incentives * ‘First-Timers Scheme’ provides incentives for new entrants into the formal sector. * Employers receive compensation for EPFO contributions for first-time employees in the manufacturing sector. * Subsidy on EPFO contributions for new employees in all sectors. Skills Programs * New central program aims to skill 2 million youth and upgrade 1,000 ITIs with industry-aligned courses. * Focus on emerging skills such as blockchain, AI, machine learning, and cybersecurity. Immersion in the Industry * Internship opportunities for 10 million youngsters in top companies. * Interns receive stipends and financial assistance. Education Loans * Model Skill Loan Scheme provides loans with government-backed guarantees. * E-vouchers for interest subsidy benefit students pursuing higher education. Women in the Workplace * Initiatives include setting up hostels and crèches for working women. * Women-specific skilling programs and promotion of market access. Significance The Budget and economic research outline a strategic plan to transform the employment landscape, boost India’s socio-economic progress, and achieve the vision of ‘Viksit Bharat’ by 2047.
By Johnny Edward
This year’s budget focused on industry-engaged employment generation, workforce development and enhancing women’s participation in the labour market. There was a focus on delivering private sector-led research and innovation, industry-aligned courses and curriculum, internships in top companies and transformation of ITIs to ensure development of quality human resources.
The economic research and budget of the Union collectively reflect India‘s commitment to developing an industry-relevant workforce and reducing unemployment. The survey signals a positive trend in the labor marketwith the unemployment rate expected to fall to 3.2% in 2022-23.
Let’s look at how both the survey and the budget will impact education, skills development and jobs.
Viksit Bharat by 2047
The Budget is a response to the Survey’s estimates of the need to create 8 million jobs annually by 2036, with priority given to youth employment. Emphasis on increasing women’s participation in the labour market and youth access to education and skills, improved alignment of education and skills with industry needs and industry immersion through internships. These measures are designed to help India achieve its vision of ‘Viksit Bharat’ by 2047.
Work-related incentives
According to the study, the net payroll additions under the Employees’ Provident Fund Organisation (EPFO)) have more than doubled over the past five years, indicating healthy growth in formal employment.
The ‘First-Timers Scheme’ is a notable announcement that will further support new entrants into the formal sector, as per the EPFO database, through an incentive equivalent to one month’s salary, payable in three instalments. The Budget encourages job creation by employers in the manufacturing sector by compensating them for EPFO contributions for the first four years of first-time employment – benefiting over 3 million youth. Employers across sectors will benefit through reimbursement of Rs 3,000 per month towards EPFO contributions for each new employee for a period of two years – with an aim to boost employment of over 5 million persons.
Skills programs
A new central programme implemented in partnership with states and industry aims to skill 2 million youth and upgrade 1,000 ITIs over the next five years through a hub-and-spoke model, with outcome-oriented courses aligned with industry needs.
As manufacturing and services increasingly merge through the adoption of futuristic technologies, new jobs require specialized skills such as blockchain, AI, machine learning, Internet of Things, cybersecurity, cloud computing, big data analytics, augmented/virtual reality, 3D printing, and web and mobile development.
Immersion in the industry
The research found that the apprenticeship system needs to be recalibrated to increase flexibility and negotiability of working hours, compensation and terms of decoupling.
The budget aims to provide internship opportunities to 10 million youngsters in 500 top companies. These one-year internships are held in real business contexts and are intended to provide participants with industry-relevant experience. Interns are given a monthly stipend of Rs 5,000 and a one-time contribution of Rs 6,000, with companies raising additional funds through CSR.
Education loans
There is a new Model Skill Loan Scheme that facilitates loans up to Rs 7.5 lakh with government-backed guarantees. It provides financial support to enable access to higher education in India by providing loans up to Rs 10 lakh. E-vouchers for interest subsidy equivalent to 3% are expected to directly benefit 100,000 students annually.
Women in the workplace
Initiatives include setting up hostels for working women in partnership with industry and setting up crèches. Women-specific skilling programmes and promotion of market access for women. Self-Help Group (SHG) enterprises are also crucial elements of this strategy.
From the education sector perspective, the Budget outlines a strategic plan to transform the employment landscape and boost India’s socio-economic progress.
The author is a partner at Grant Thornton Bharat. Views are personal
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