Union Minister of Finance Nirmala Sitharaman made big announcements for the employment of first-time employees in her Budget Speech for 2024-25, on July 23, 2024, in what is being seen as a major push towards job creation for the youth.
There will be a direct benefit transfer of one month salary to all employees newly entering the workforce. The government will also reimburse employers up to Rs 3,000 per month for the coming two years towards EPFO contributions for each additional employee, Union Minister of Finance Nirmala Sitharaman said in her Budget Speech for FY 2024-25
Union Minister of Finance Nirmala Sitharaman made big announcements for the employment of first-time employees in her Budget Speech for 2024-25, on July 23, 2024, in what is being seen as a major push towards job creation for the youth.
“Our government will implement the following three schemes for employment-linked incentive as part of the Prime Minister’s package — enrolment in the Employees’ Provident Fund (EPF), focus on recognition of first-time employees, and support to employees and employers scheme,” Sitharaman said in her Budget Speech for FY 2024-25.
In her seventh consecutive Budget announcement, Sitharaman said the Centre will float three employment-linked incentive schemes for employees and employers. These schemes will be based on enrolment in the Employees’ Provident Fund Organisation (EPFO), focusing on particularly recognising the first-time employees.
She also announced one month wage to all persons newly entering the workplace in all formal sectors.
“Job creation in the manufacturing sector will be incentivised through a scheme linked to the employment of first-time employees. Direct Benefit Transfer of one month salary in three instalments to first-time employees as registered in the EPFO will be up to Rs 15,000. The eligibility limit will be a salary of Rs 1 lakh per month. This scheme will benefit 21 million youth,” she said.
She said the scheme has been designed to extend incentives to both employees and employers concerning EPFO contributions for the first four years of employment.
“The creation of additional employment in “manufacturing sector” would be incentiviced in the form of reimbursement of part of EPFO contribution by the employer and employee. This scheme intends to operate for a longer period of 4 years,” says L. Badri Narayanan, Executive Partner at Lakshmikumaran & Sridharan Attorneys.
However, Narayanan noted that the rules relating to (a) determination of new employment generation, (b) determination of remuneration payable to them, (c) form and manner of application for the scheme, and (d) manner of receipt of the subsidy, are yet to be notified by the Government.
It will benefit three million youth immediately and cover additional employment in all sectors. The Centre will also reimburse employers up to Rs 3,000 per month for the coming two years towards EPFO contributions for each additional employee. In all, this initiative will boost the additional employment of five million people across the country.