Prime Minister’s Package for Indian Youth in Budget 2024

In a groundbreaking move by announcing a special Package for Indian Youth in Budget 2024-25 that promises to reshape workforce development and to check the problem of unemployment in the country. The government has unveiled multiple comprehensive schemes for education, skilling, and internship schemes as part of this year’s budget with a total outlay of 2 lakh crore and a beneficiary base of 410 lakh youth.

Out of 9 priority sectors mentioned in the budget, Priority 2 announces Package for Indian Youth in Budget 2024 which focuses on Employment & Skilling under which the government has announced many schemes and initiatives.

These initiatives are not just a package of fiscal allocation; they represent a strategic investment in the nation’s most valuable resource: the youth, with a keen focus on enhancing educational outcomes, fostering practical experience bridging the skills gap, and preparing the next generation for a rapidly evolving real-world job market and industry needs.

The government through the Package for Indian Youth in Budget 2024 also ensures a higher participation of women in the workforce by setting up working women hostels in collaboration with industry and establishing creches.

Let us navigate the intricate details of these new programs: –

Employment Linked Incentive Schemes

The government in the Package for Indian Youth in Budget 2024 has launched 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package.

These schemes are for employment generation in the formal sector which will be based on enrolment in the Employees’ Provident Fund Organization (EPFO), and focus on the generation and recognition of first-time employees, and support to both employees and employers.   

Employment Linked Incentive Scheme A: For First Timers

Key features of scheme:

• One month’s wage as a subsidy with a maximum limit of Rs.15,000.
• The scheme under the Package for Indian Youth in Budget 2024 is Applicable to all sectors
• First-time employees’ have a learning curve before they become fully productive, this subsidy is to assist employees and employers in hiring first-timers who are getting their first registration with EPFO.
• Applicable to all persons newly entering the workforce with a wage/salary less than 1 lakh per month.
• Subsidy will be paid to the employee in three equal instalments
• Employee must undergo a compulsory online Financial Literacy course before claiming the second instalment.
• Subsidy to be refunded by the employer if the employment to the first timer ends within a year of recruitment.
• The scheme under the Package for Indian Youth in Budget 2024 is expected to cover approximately 10 lakh persons per annum and a total of 210 lakh youth.
• The scheme comes with a sunset clause and will be in force for 2 years.

Employment linked Incentive Scheme B: Job creation in manufacturing Sector

Key features of scheme:

• This scheme under the Package for Indian Youth in Budget 2024 is applicable for substantial hiring of first-time employees in the manufacturing sector
• All employers who are corporate entities and those non-corporate entities with a three-year registration with EPFO will be eligible.
• Employer must hire the following number of previously non-EPFO first-time enrolled workers:
  • A minimum of 50 employees
  , or
  • 25% of the previous year’s number of EPFO employees

[whichever is lower]

Incentive will be paid for four years partly to the employee and partly to the employer as follows:

1. Year 1, Incentive of 24% of wage/salary, shared equally between employer & employee.
2. Year 2, Incentive of 24% of wage/salary, shared equally between employer & employee.
3. Year 3, Incentive of 16% of wage/salary, shared equally between employer & employee
4. Year 4, Incentive of 8% of wage/salary, shared equally between employer & employee

• Employer must maintain a threshold level of enhanced employment throughout the tenure of four years, failing which subsidy benefit will be stopped.
• Employee must be an in-source employee and directly working in the entity paying salary/wage.
• Employees with a wage/ salary of up to 1 lakh per month will be eligible, subject to membership of EPFO.
• For those with wages/salary greater than 25,000/month, the incentive will be calculated at 25,000/month.
• Subsidy to be refunded by the employer if the employment to the first timer ends within a year of recruitment.
• This subsidy will be in addition to benefits under Part A, where One month’s wage as a subsidy of Rs.15,000 is given.
• The scheme under the Package for Indian Youth in Budget 2024 comes with a sunset clause and will be in force for 2 years. This means that those who are registered under the scheme within 2 years of implementation of the scheme will get the benefits for the next four years.
• The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

Employment Linked Incentive Scheme C: Support to employers in all sectors

Key features of scheme:

• Applicable to an employer who: Increases employment above the previous year’s number of EPFO employees by at least two employees for those with less than 50 employees or Increases employment above the previous year’s number of EPFO employees by at least 5 employees for those with 50 or more employees
• For employees whose salary does not exceed 1,00,000/month.
• New employees under this Part need not be new members of EPFO. This means that this scheme applies to both first times and those who have had previous employment.
• For two years Government will reimburse EPFO employer contribution of up to 3,000/month to the Employer for the additional Employees hired as per the above-mentioned criteria in the previous year.
• If the employer creates more than 1000 jobs:
  • Reimbursement will be done quarterly for the previous quarter.
• The subsidy will continue for the 3^rd and 4^th year on the same scale as Employer benefits in Part-B (Job creation in the manufacturing Sector).
• Not applicable for those Employees covered under Part-B (Job creation in the manufacturing Sector). but this subsidy will be in addition to benefits under Part-A (scheme for first-timers.
• The scheme under the Package for Indian Youth in Budget 2024 comes with a sunset clause and will be in force for 2 years. This means that those who are registered under the scheme within 2 years of implementation of the scheme will get the benefits for the next four years.
• The scheme is expected to incentivize additional employment of 50 lakh persons.  

Skilling Programme and Upgradation of Industrial Training Institutes

Key features of scheme:

• This under the Package for Indian Youth in Budget 2024 scheme will be implemented through hub and spoke model where 1000 Industrial Training Institutes (ITIs) to be upgraded in five years
• New Centrally Sponsored Scheme Focusing on outcome and quality of skilling in collaboration with states and industry
• Course content and design aligned to needs of industry
• This scheme has total outlay of 60,000 crore over five years
  • Government of India will spend —30,000 crore
  • All participating state governments will spend—20,000 crore
  • Industries will spend—10,000 crore (including their CSR  funding)
• 200 hubs and 800 spoke ITIs will be developed –all with industry collaboration
  • Re-design and review of existing courses according to industry needs.
  • New courses will be designed for emerging needs.
  • 1-to-2-year courses in all 1000 ITIs
  • Short-term specialised courses only in Hub ITIs
• Capacity augmentation of 5 national institutes for training of trainers
• 20 lakh students expected to benefit from this scheme under the Package for Indian Youth in Budget 2024.

Internship in Top Companies

Key features of scheme:

• One crore youth to be skilled by India’s top 500 companies in next five years.
• They will gain exposure for 12 months to real-life business environments, varied professions and employment opportunities through the Prime Minister’s Internship with a monthly allowance of Rs. 5,000.
• Applicable to those who are not employed and not engaged in any full-time education.
• Youth between the ages of 21 and 24 will be eligible to apply.
• Cost sharing (per annum):
  • Government – 54,000 towards monthly allowance (plus a grant of 6,000 for incidentals)
  • Companies – Rs 6,000 from their respective CSR funds towards monthly allowance
• Companies can spend up to 10 per cent of the internship cost from their CSR funds.   
• Participation of companies is completely voluntary
• Applications through an online portal
• Company to select from a short list; shortlisting based on objective criteria with emphasis on those with lower employability
• Ineligible candidates (indicative list)
  • Candidate has IIT, IIM, IISER, CA, CMA etc as qualification
  • Any member of the family is assessed in Income Tax
  • Any member of the family is a government employee, etc.
• Company is expected to provide the person an actual working experience on a skill in which the company is directly involved.
• At least half the time should be practical training in actual working experience/job environment, not in the classroom.
• In case the Company cannot directly do so, it must tie up with:
  • Companies in its forward and backward supply chain (e.g. suppliers or customers) or
  • Other Companies/Institutions in its Group or otherwise
• This scheme is implemented in three phases where Phase 1 of the scheme will be for 2 years followed by Phase 2 for 3 years.
• This internship scheme under the Package for Indian Youth in Budget 2024 will benefit 1 crore youth in 5 years.

Skilling Loans

Under the Package for Indian Youth in Budget 2024 the Model Skill Loan Scheme will be revised to facilitate loans up to Rs.7.5 lakh with a guarantee from a government-promoted Fund. This measure taken by the government is expected to help 25,000 students every year.

Education Loans

To help youth who have not been eligible for any benefit under government schemes and policies, under the Package for Indian Youth in Budget 2024 a financial support through loans up to 10 lakhs for higher education will be supported by the government to study in domestic institutions.

E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 percent of the loan amount. 

Read the comprehensive coverage of Union Budget 2024-25

Making Indian youth ready for future

Central to these initiatives under the Package for Indian Youth in Budget 2024 is a concerted effort to align the large demographic dividend with the evolving needs of the job market, ensuring that the youth acquire relevant skills that enhance their employability. By integrating practical training through internship programs, the schemes promise to bridge the often-cited gap between academic learning and professional experience and make India the Vishwa guru.

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