Govt Allocates Rs 1.09 Lakh Crore For Employment-Linked Incentives

The Central government’s new EPFO-backed schemes aim to create 29 million formal jobs through a Rs 1.09 lakh crore allocation for employment-linked incentives.

The plan includes implementing uniform labour codes across States to simplify business compliance and encourage formal employment. Integration of unorganised worker data with the eShram portal will enable targeted welfare schemes and promote workforce formalisation. Modernisation of employment exchanges and inclusion of construction workers in these schemes are additional measures. While success depends on implementation and economic factors, the comprehensive approach addresses regional disparities through localised strategies, supporting the job creation target.

Talking to Bizz Buzz, Surinder Bhagat, CEO & Founder Gigin Technologies said: “The new Employees’ Provident Fund Organisation (EPFO)-backed employment schemes are expected to drive job creation in several key sectors. Manufacturing, particularly in areas like textiles, electronics, and automobiles, is poised for growth as employers receive incentives to hire new workers, with support for employee provident fund contributions. The schemes also target services sectors such as IT and financial services, encouraging the formalisation of more jobs within these industries.”

Infrastructure, bolstered by ongoing government projects, will create direct and indirect employment opportunities. MSMEs, especially in rural areas, will benefit from credit guarantee schemes that help stimulate job creation. Additionally, sectors like healthcare and pharmaceuticals are expected to grow as domestic production and research expand, he said.

The government will focus on identifying sectors with the highest potential for formal job creation by leveraging existing employer data under the EPFO. These efforts are supported by sector-specific incentives and regional focus, ensuring targeted job growth across industries and regions.

As per the ILO report in 2023, with 47 per cent of Indian workers underqualified for their jobs, these programs offer targeted skill development. There's significant growth potential, as only 0.14 per cent of India's workforce is currently engaged in apprenticeships. The trend towards skills-based hiring underscores the importance of job-ready skills. Many employers view these programs as cost-effective talent development strategies. They can also help address gender disparities in skills and employability.

With a 10 per cent rise in formal job creation under the EPFO in April 2024 - 1.89 million jobs added compared to 1.72 million in April 2023 - the momentum for job creation is clearly building. The recently announced government schemes are designed to sustain this progress by addressing critical gaps in the labor market, particularly for new workforce entrants, industries requiring rapid workforce expansion, and sectors like manufacturing, which have been pivotal in driving economic recovery.

Sumit Kumar, Chief Strategy Officer at TeamLease Degree Apprenticeship said, “One of the standout initiatives is a wage subsidy scheme offering up to Rs 15,000 for first-time employees, distributed over three installments. This scheme is designed not only to facilitate the integration of approximately 21 million youth into the formal job market but also to alleviate the financial constraints often faced by young job seekers transitioning from education to employment.”