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Let’s understand how it will impact education, skill development, and jobs.
This year’s Budget emphasised on industry-engaged employment generation, workforce development, and enhancement of women participation in the workforce. There was a focus on providing private sector-led research and innovation, industry-aligned courses and curriculum, internship with top companies, and transformation of ITIs to ensure development of quality workforce.
The Economic Survey and the Union Budget collectively reflect India’s commitment towards developing industry-relevant workforce, and reducing unemployment. The Survey notes a positive trend in the labour market, with the unemployment rate dropping to 3.2% in 2022-23.
Let’s understand how both the Survey and the Budget will impact education, skill development, and jobs.
The Budget responds to the Survey’s estimates on the need to create 8 million jobs annually until 2036, prioritising youth employment. Emphasis on increasing women’s participation in workforce and youth’s access to education and skilling, improved alignment of education and skilling to industry needs, and industry immersion through internship. These measures are designed to advance India towards its vision of ‘Viksit Bharat’ by 2047.
As per the Survey, net payroll additions under Employees’ Provident Fund Organisation (EPFO) have more than doubled during the past five years, signalling healthy growth in formal employment.
The ‘First-Timers Scheme’ is a standout announcement that will further support newcomers to the formal sector, as recorded into the EPFO database, through an incentive equivalent to one month’s salary payable in three instalments. The Budget encourages job-creation by employers within the manufacturing sector by compensating them towards EPFO contributions for the first four years for the first-time employed – benefiting over 3 million youth. Employers across all sectors will benefit through the reimbursement of Rs 3,000 monthly towards EPFO contributions for each new hire for a period of two years – with the aim to boost employment of over 5 million individuals.
A new central scheme to be implemented in partnership with states and industry aims to skill 2 million youth over the next five years and upgrade 1,000 ITIs through a hub-and-spoke model, with outcome-oriented courses aligned to industry needs.
With manufacturing and services converging through adoption of futuristic tech, emerging jobs demand specialised skills including blockchain, AI, machine learning, Internet of things, cybersecurity, cloud computing, big data analytics, augmented/virtual reality, 3D printing, and Web and mobile development.
The Survey highlighted the need for recalibration of the apprenticeship framework to enhance flexibility and negotiability in work hours, compensation, and disengagement terms.
The Budget focuses on providing internship opportunities to 10 million youth in 500 top companies. These year-long internships are set in genuine business contexts and aim to furnish participants with industry-relevant experience. Interns are to be awarded a monthly stipend of Rs 5,000 and a one-time aid of Rs 6,000, with companies to bring in complementing funds through CSR.
There is a new Model Skill Loan Scheme facilitating loans up to Rs 7.5 lakh with government scheme-backed guarantees. It offers financial support to enable access to higher education within India, by providing loans up to Rs 10 lakh. E-vouchers for interest subvention equivalent to 3% are expected to directly benefit 100,000 students annually.
Initiatives include establishing working women hostels in collaboration with industry and setting up crèches. Women-specific skilling programmes and the promotion of market access for women Self-Help Group (SHG) enterprises are also pivotal elements of this strategy.
From the perspective of the education industry, the Budget lays out a strategic blueprint designed to transform the employment landscape and propel India’s socio-economic advancement.
This article first appeared in Financial Express on 29 July 2024.