Informist, Tuesday, Sep 17, 2024

NEW DELHI – The Union Cabinet is likely to approve three employment-linked incentive schemes soon, Labour Minister Mansukh Mandaviya said today. The labour ministry has already prepared a Cabinet note for the schemes, which were announced in the Union Budget for 2024-25 (Apr-Mar).

"I expect approval immediately from the Cabinet," the minister said at a press conference. "Once the work is complete, I will take the proposal to the Cabinet."

The Union Cabinet is scheduled to meet on Wednesday. Mandaviya, however, did not specify if this particular proposal would be discussed at Wednesday's meeting.

Labour Secretary Sumita Dawra today chaired an inter-ministerial meeting on employment-linked incentive schemes, and discussed the broad contours of the scheme.

In the Budget for 2024-25, Finance Minister Nirmala Sitharaman announced three employment-linked incentive schemes as part of the prime minister's package.

Under the first scheme, the government will provide a month's wages in three instalments to first-time employees in all formal sectors up to 15,000 rupees. Any first-time employee with a salary less than 100,000 rupees a month will be eligible for this scheme. The first-time employee will have to undergo a compulsory online financial literacy course before claiming the second instalment. The subsidy will have to be refunded by the employer if the employment for the first-timer ends within 12 months of recruitment. The enrolment duration for this scheme is two years, and the government will spend 230 bln rupees on it.

The second scheme will focus on job creation in the manufacturing sector. It 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 to the employee and the employer with respect to their Employees' Provident Fund Organisation contribution in the first four years of employment, Sitharaman had said. The scheme will be for two years and is expected to benefit 3 mln youth entering employment, and their employers. It will cost the government a total of 520 bln rupees.

The third scheme aims to provide support to employers in all sectors. The government will reimburse employers up to 3,000 rupees a month for two years towards their EPFO contribution for each additional employee. The scheme is expected to incentivise additional employment of 5 mln people. It will cost the government 320 bln rupees. End

Reported by Shubham Rana

Edited by Rajeev Pai

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