CII proposes seven-point agenda to boost employment generation in budget

The upcoming annual budget for FY26 could announce further measures to boost employment generation, CII said on Sunday, emphasising that job creation at a mass scale is important to engage the young population productively, and drive inclusive growth in the world's most populous nation.

The industry body has suggested a seven-point agenda to harness India's demographic dividend, including an integrated national employment policy, support to labour-intensive sectors, and setting up an international mobility authority, among other targeted measures.

With a median age of just 29 years, India is a young country, and is set to add 133 million people to its working-age population by 2050.

 

The government could consider launching an internship programme in government offices in rural areas for the college-educated youth, CII said.

It argued that this initiative would create short-term employment opportunities in government offices while bridging the gap between education and professional skills.

The programme would also help augment the available manpower resources for the effective implementation of various rural programmes and government initiatives.

CII has also proposed introducing a new provision under income tax rule in lieu of Section 80JJAA to encourage new employment. The new provision should continue as Chapter VIA deduction from gross total income, which is available even if a taxpayer opts for concessional tax regime.

It has proposed an integrated national employment policy which could subsume under its ambit the slew of employment generating schemes currently in works by various ministries/states.

In addition, the unified policy could also build on the single integrated employment portal -- National Career Service (NCS) -- wherein all the data can flow into this from various ministries and state portals.

Highlighting that increasing women's participation in the workforce, which currently is low, can further boost the Indian economy, CII said, new initiatives including the construction of dormitories using CSR funds, the formalisation of sectors like care economy, and establishing government-supported creches in industrial clusters could be taken to increase female labour force participation.

Moreover, rolling out labour codes while ensuring social security coverage to the gig and platform workers would further strengthen the employment landscape.

Many parts of the world are facing workforce shortages due to ageing populations, and India should leverage this opportunity. The government could consider setting up an international mobility authority under the Ministry of External Affairs. This authority could facilitate G2G collaborations for helping Indian youth tap the overseas employment opportunities.

The authority could also work with the Ministry of Skill Development and Entrepreneurship to help develop skill development programmes aligned with global opportunities. In addition to technical skills, the programmes should also include cultural training, and foreign language skills.

Chandrajit Banerjee, Director General, CII, said, "Coupled with higher employment, India also needs to ensure that productivity goes up. India's Incremental Capital Output Ratio (ICOR) needs to trend down from its present level of 4.1. We need to establish metrics of measuring this. In fact, the Union Budget could set up an expert committee to study this in greater detail and recommend measures on way forward.