Rs 15,000 On First Job To Rs 5,000 For Interns In Top Firms, Skill & ITI Upgrade: Budget For Youth In 5 Points

From one-month wage for youths at their first jobs to internships and skilling, Finance Minister Nirmala Sitharaman announced three schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package, in the Budget on Tuesday. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.

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The Centre will also facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organise women-specific skilling programmes, and promotion of market access for women SHG enterprises.

A look at everything on offer for youths seeking jobs and employers:

1. SCHEME A: FOR FIRST-TIMERS

This scheme will offer month’s wage as subsidy (maximum Rs 15,000) and will be applicable to all sectors.  Those newly entering the workforce (EPFO) with wage/salary less than Rs 1 lakh per month will be eligible for it. The scheme is expected to benefit 2.1 crore youth.

• Subsidy will be paid to the employee in three installments.
• Employee must undergo compulsory online Financial Literacy course before claiming the second installment.
• Subsidy to be refunded by employer if the employment to the first-timer ends within 12 months of recruitment.
• Expected to cover approximately 1 crore persons per annum.
• Scheme will be for 2 years.

2. SCHEME B: JOB CREATION IN MANUFACTURING

It will be applicable for substantial hiring of first-time employees in the manufacturing sector. All employers which are corporate entities and those non-corporate entities with a three year track record of EPFO contribution will be eligible. The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

Employer must hire at least the following number of previously non-EPFO enrolled workers:

• 50 or 25% of the baseline (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
  
• Employer must maintain threshold level of enhanced employment throughout, failing which subsidy benefit will stop.
• Employee must be directly working in the entity paying salary/wage (i.e. in-sourced employee).
• Employees with a wage/ salary of up to Rs 1 lakh per month will be eligible, subject to contribution to EPFO.
• For those with wages/salary greater than Rs 25,000/month, incentive will be calculated at Rs 25,000/month.
• Subsidy to be refunded by employer if the employment to first-timer ends within 12 months of recruitment.
• This subsidy will be in addition to benefit under Part-A.
• Scheme will be for 2 years.

3. SCHEME C: SUPPORT TO EMPLOYERS

It will be applicable to an employer who increases employment above the baseline (previous year’s number of EPFO employees) by at least two employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) and sustains the higher level, and for employees whose salary does not exceed Rs 1,00,000/month. The scheme is expected to incentivise additional employment of 50 lakh persons.

New employees under this Part need not be new entrants to EPFO.

For two years, the Government will reimburse EPFO employer contribution [up to] Rs 3,000/month to the Employer for the additional Employees hired in the previous year.

If the employer creates more than 1,000 jobs:

• Reimbursement will be done quarterly for the previous quarter.
• Subsidy will continue for the 3rd and 4th year on the same scale as Employer benefit in Part-B.
• Not applicable for those Employees covered under Part-B.
• This subsidy will be in addition to benefit under Part-A.
• The scheme will be for 2 years.

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4. Skilling Programme and Upgradation of Industrial Training Institutes

A total of 1,000 Industrial Training Institutes (ITIs) to be upgraded in hub and spoke arrangements in five years. There will also be a new Centrally Sponsored Scheme in collaboration with states and industry. The focus will be on outcome and quality of skilling and the course content and design will be aligned with the industry needs. As part of the scheme, 20 lakh youth will be skilled over a 5-year period.

It will be given a total outlay of Rs 60,000 crore over five years:

• Government of India: Rs 30,000 crore
• State Governments: Rs 20,000 crore
• Industry: Rs 10,000 crore (including CSR funding)

200 hubs and 800 spoke ITIs — all with industry collaboration — will be set up. It will include:

• Re-design and review of existing courses
• New courses
• 1- to 2-year courses in all 1,000 ITIs
• Short-term specialised courses in Hub ITIs

Steps will be taken for capacity augmentation of five national institutes for training of trainers.

5. Internship in Top Companies

The government plants to skill one crore youth in India’s top companies in five years under the 12 months Prime Minister’s Internship with monthly allowance of Rs 5,000, along with a one-time assistance of Rs 6,000. It will be applicable to those who are not employed and not engaged in full-time education. Youth aged between 21 and 24 will be eligible to apply.

Cost sharing (per annum)

• Government: Rs 54,000 towards monthly allowance (plus Rs 6,000 grant for incidentals)
• Company: Rs 6,000 from CSR funds towards monthly allowance
• Training cost to be borne by the Company from CSR funds
• Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure)

Participation of companies is voluntary. Applications through an online portal. Company to select from a short list; short listing 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 to Income Tax
• Any member of the family is a government employee, etc.

The 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 in actual working experience/job environment, not in 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.
• Will be co-ordinated with State Government initiatives wherever applicable.
• Phase 1 of the scheme will be for 2 years followed by Phase 2 for 3 years.

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