The entire nation eagerly awaited Budget 2024, and Finance Minister Nirmala Sitharaman presented a plan to address the country’s long-term needs. The budget places substantial emphasis on youth and employment opportunities, prioritising sustainable growth over short-term gains.
In a world where India is recognised for its abundant resources, multinational companies see the country as a prime destination for business expansion. To harness this potential, India must develop adequate infrastructure and skills aligned with the global economy. Embracing the philosophies of Vasudhaiva Kutumbakam and unity in diversity, it can leverage its diverse population and skill sets to maximise human resource utilisation.
With a substantial young population, it is crucial to guide them effectively to prevent potential issues. The government’s current budget reflects a strong focus on youth and skill development. Addressing the mismatch between industry requirements and the skills of graduates, highlighted in the 2024 Economic Survey, is a priority. The government plans to bridge this gap by providing internship opportunities in the top 500 companies to 10 million young individuals over the next five years.
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Budget 2024 focus on skills
This initiative seeks to offer 12 months of exposure to real-world business environments, diverse professions, and various employment opportunities. Funding should be sourced from the CSR funds of respective companies, covering training costs and an internship allowance of Rs 5,000 per month, along with a one-time assistance of Rs 6,000. Companies will cover training expenses and 10 percent of the internship cost from their CSR funds, supplemented by government grants.
With the country’s unemployment rate at 9.2% in June 2024, this budget introduces several steps to address this issue. The Employment Linked Incentive looks to tackle unemployment, though its impact will depend on the stabilisation of the global economy. The adoption of AI should be holistic, balancing technological advancement with employment to avoid adverse economic effects. To specifically address the challenges in the labour market, the budget introduces three key schemes.
Taking unemployment head on
Scheme A: The first scheme targets first-time employees registered with the EPFO. These employees will receive a direct benefit transfer equivalent to one month’s salary, capped at Rs 15,000, distributed in three installments. This benefit is available to those earning a monthly salary of up to Rs 1 lakh, thus providing a significant boost to young professionals starting their careers.
Scheme B: The second scheme looks to create jobs in the manufacturing sector, and incentivises both employees and employers regarding their EPFO contributions in the first four years of employment. This initiative is designed to stimulate growth in the manufacturing sector, which is crucial for overall economic development. By reducing the financial burden on both employees and employers, the scheme encourages more job creation and sustains employment in this vital sector.
Scheme C: The third scheme focuses on support to employers not covered by other schemes. This initiative emphasises centre-state collaboration to skill 2 million youth over five years and upgrade 1,000 Industrial Training Institutes to a hub-and-spoke model with an outcome orientation. This approach ensures that a broader range of employers can benefit from government support, thereby fostering a more inclusive economic environment.
In addition to these schemes, the Model Skill Loan Scheme will be revised to provide loans of up to Rs 7.5 lakh, guaranteed by a government-promoted fund, benefiting 25,000 students annually. Furthermore, financial support for loans up to Rs 10 lakh for higher education at domestic institutions will be provided to youth not qualifying for other schemes, with e-vouchers offering an annual interest subvention of 3% on the loan amount.
India’s development hinges on its youth population, and with proper guidance, they can significantly benefit their families and the nation. The comprehensive measures introduced in the 2024 budget reflect a commitment to nurturing the potential of the youth, aligning their skills with industry requirements, and fostering an environment conducive to sustainable economic growth. Through strategic investments in education, skill development, and employment incentives, the government aims to create a robust framework that not only addresses current challenges but also paves the way for a prosperous future.
Dr Badri Narayanan Gopalakrishnan is Fellow, NITI Aayog. Views expressed are personal.