Accordingly, the budget has announced 3 schemes. In the first scheme, the government will provide a one-month wage to all persons newly entering the workforce in all formal sectors. The new employee who will show up in the Employees’ Provident Fund Organisation (EPFO) will be paid via direct benefit transfer, one-month salary in three installments, the maximum amount being ₹15,000 per person. The eligibility limit will be a salary of ₹1 lakh per month. The scheme is expected to benefit 2.1 crore youth over 2 years.
The second scheme is only for manufacturing companies where companies must hire 50 first-timers or 25% of their previous year’s EPFO-enrolled employees. The government will pay between 8-24% of the newcomer’s salary, which will be shared between the employer and employee. The idea is that the company is incurring costs in training the newcomer and that subsidy will be paid for 4 years.
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The third scheme involves a subsidy only for employers. The government will reimburse employers the EPFO contribution of the company towards the new employee up to ₹3,000 per month. This is for employees whose salary does not exceed ₹1,00,000 per month. This is applicable even if the employee is already in EPFO. This scheme runs for two years.
Industry leaders have responded positively to these initiatives, recognising their potential to transform the employment landscape.
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Sangita Reddy, Joint MD of Apollo Hospitals, emphasised the significance of these schemes for the healthcare sector. She highlighted the industry’s role as a major employer and its commitment to training a skilled workforce.
“These are very good schemes. We will be utilising them and studying further how we can enhance employment and ensure that these people are placed well in good jobs,” she said.
Ravi Kyran of Bajaj Auto also praised the schemes, particularly those targeting job creation in manufacturing. “Both Scheme B and Scheme C would be quite applicable to us. For first-time entrants and entry-level employees, these schemes will be beneficial,” he noted. However, he called for clarity in the implementation rules to ensure inclusivity and avoid penalisation.
Richard Lobo, Chief People Officer at Tech Mahindra, lauded the government’s direct intervention in encouraging companies to hire and train new employees. “By investing in skill building of the youth, you’re going to have people who are skilled and able to take advantage of the next generation of skills. This initiative will spur companies to focus on skill building,” he said.
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