Analyzing Union Budget 2024-25: Employment Initiatives

Union Budget 2024-25: Addressing India's Employment Crisis

The Union Budget for 2024-25 places a significant emphasis on tackling the employment crisis in India. This critical issue has been a focal point of political discourse, and the Budget introduces a comprehensive ₹2 lakh crore package designed to create job opportunities and equip the workforce with relevant skills.

This package aims to assist 4.1 crore youth over the next five years through three key employment-linked incentive schemes.

Key Components of the Employment Package

• Incentive Schemes for Fresh Entrants: Two schemes are specifically designed to encourage the hiring of fresh entrants into the job market. These initiatives ensure that new employees are retained for at least one year, with subsidies provided to employers who hire young, inexperienced workers. This approach lowers barriers for youth and offers them essential work experience.
• Incentives for Scaling Up Employment: A third scheme incentivizes companies to increase their workforce beyond the previous year's levels. This aims to stimulate job creation by making it financially attractive for firms to expand their headcount.
• Skill Development Initiatives: The Budget proposes upgrading 1,000 industrial training institutes (ITIs) with industry-aligned courses. This aims to bridge the gap between the skills available in the labor market and those required by employers, thereby enhancing the employability of the workforce.
• Ambitious Internship Programme: An internship programme targeting one crore youth in 500 top companies has been announced. The Centre will cover the majority of stipend costs, encouraging firms to utilize their Corporate Social Responsibility (CSR) funds for the remainder. This initiative aims to provide practical work experience and improve job readiness among young people.

Challenges and Critiques

The employment situation in India has been a point of contention, with critiques often highlighting the issue of jobless growth. The preference for capital-intensive investments, driven by outdated labor laws and regulatory hurdles, has significantly discouraged the creation of labor-intensive industries. Additionally, the informal sector, which provides a large portion of India’s employment, has been adversely affected by several economic shocks, including demonetization, the Goods and Services Tax (GST) rollout, and the COVID-19 pandemic lockdowns.

Despite the good intentions behind the employment package, its success will depend on several factors:

• Implementation and Uptake: The effectiveness of the incentive schemes and internship programmes relies on participation from the private sector and smooth implementation of these initiatives.
• Structural Reforms: Long-term job creation requires reforms in labor laws to make hiring and firing more flexible, thus encouraging businesses to expand their workforce.
• Government Vacancies: The government must expedite the filling of lakhs of vacancies in public sector units and government departments, which can provide immediate employment opportunities and set a positive example for the private sector.
• Boosting Consumption: For businesses to expand and hire more employees, there needs to be an increase in consumer demand. Without a strong consumption push, the private sector may lack sufficient reasons to expand capacity or workforce, despite available subsidies.

Conclusion

The Union Budget 2024-25's focus on employment marks a significant acknowledgment of India's pressing jobs crisis. While the proposed measures show promise, their impact will be closely monitored, particularly regarding how effectively they can stimulate job creation and address structural unemployment issues. The government's approach reflects a broader recognition of the need for economic policies that promote growth while ensuring inclusivity and benefits for the labor market. The success of these initiatives will depend on a coordinated effort between the government, private sector, and other stakeholders to foster a conducive environment for job creation and economic stability.

Frequently Asked Questions (FAQs)

Q1. What is the main focus of the Union Budget 2024-25?
Answer: The Union Budget 2024-25 primarily focuses on addressing the employment crisis in India by introducing a ₹2 lakh crore package aimed at creating job opportunities and enhancing workforce skills.

Q2. How many youth are expected to benefit from the employment package?
Answer: The employment package aims to assist 4.1 crore youth over the next five years through various incentive schemes and skill development programs.

Q3. What types of schemes are included in the budget for employment generation?
Answer: The budget includes incentive schemes for fresh job entrants, incentives for scaling up employment, skill development initiatives, and an ambitious internship programme targeting youth.

Q4. What challenges does the employment package face?
Answer: Challenges include the need for effective implementation, structural reforms in labor laws, the filling of government vacancies, and boosting consumer demand to support job creation.

Q5. How does the internship programme benefit young people?
Answer: The internship programme provides practical work experience to one crore youth, enhancing their job readiness and allowing them to gain valuable skills in real-world settings.

UPSC Practice MCQs

Question 1: What is the financial commitment of the Union Budget 2024-25 towards employment initiatives?
A) ₹1 lakh crore
B) ₹2 lakh crore
C) ₹3 lakh crore
D) ₹4 lakh crore
Correct Answer: B

Question 2: How many industrial training institutes (ITIs) will be upgraded according to the budget?
A) 500
B) 750
C) 1,000
D) 1,500
Correct Answer: C