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Union Budget 2024: Finance Minister Nirmala Sitharaman presented the Budget 2024 in Parliament on Tuesday, announcing a series of employment and skilling-related schemes to leverage India’s human capital.
Among them, a key highlight is the Finance Ministry’s decision to support freshers joining the workforce by providing them with financial assistance up to Rs 15,000.
As part of the Centre’s employment-linked incentive scheme, first-time employees in the formal sector will be offered one month’s salary as a subsidy up to a maximum of Rs 15,000, Sitharaman announced in the Budget.
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Who is eligible for the wage subsidy scheme?
“First-timers have a learning curve before they become fully productive,” she said, noting that the subsidy is targeted to benefit both the employees and employers in hiring freshers.
According to the Budget documents, the wage subsidy scheme applies to newcomers in all formal sectors, provided their monthly salary does not exceed Rs 1 lakh.
This means the employees will need to be registered with the EPFO or Employees’ Provident Fund Organisation, which oversees a retirement benefit scheme for salaried employees in India.
Sitharaman said that this wage subsidy will be paid to the employees in three installments. After the first installment, the new hires are mandated to undergo a compulsory online Financial Literacy course to be eligible for the second installment of the subsidy.
What if employment is terminated within one year?
According to the provisions of the scheme, the employer will be tasked with refunding the subsidy if the company decides to terminate the employment of a new joiner within 12 months of recruitment.
The Centre expects to cover about one crore freshers annually with the introduction of this scheme, which it said, will be applicable for two years.
The total outlay if this scheme is Rs 23,000 crore, Sitharaman said.
Is this scheme applicable to first-time interns?
As part of the Budget, a separate employment-linked incentive scheme has been announced for interns, who are unskilled students or trainees, joining the workforce (sometimes without pay) to gather experience in a particular field.
Sitharaman announced that the Centre will develop a policy to provide paid internship opportunities to students at India’s top 500 companies over the next five years. She mentioned that this scheme aims to benefit 10 million youth.
Under this scheme, the interns will get a monthly stipend of Rs 5,000. Additionally, the Centre plans to offer them a one-time assistance of Rs 6,000 to help them start their careers.
The interns will be trained by the companies, which are expected to bear its cost using their Corporate Social Responsibility funds. The companies will also be required to bear 10 per cent of the internship cost” the finance minister announced.
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