Finance Minister Nirmala Sitharaman has proposed three new employment-linked incentive schemes in EPFO for employers and employees. These initiatives are part of the government’s efforts to promote job creation and economic growth.
These three new schemes will benefit first-time employees enrolling in the EPFO. Scheme A offers one month’s salary up to Rs 15,000 for freshers, Scheme B focuses on job creation in manufacturing, and Scheme C provides support to employers.
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Scheme A – Support for First-Time Employees
Scheme A is designed to provide direct financial support to first-time employees across all formal sectors. It offers a one-month salary subsidy of up to Rs 15,000, paid in three installments, for new employees registered with the Employees’ Provident Fund Organisation (EPFO). This financial aid will help first-time employees during their initial learning period, making it easier for employers to hire fresh talent.
To receive the second installment, employees will have to complete an online financial literacy course. If an employee leaves within 12 months of being hired, the employer must refund the subsidy.
The scheme targets employees earning up to Rs 1 lakh per month and aims to benefit 2.1 crore young people over two years, with a budget of Rs 23,000 crore.
Scheme B – Promoting Job Creation in Manufacturing
Scheme B focuses on boosting job creation in the manufacturing sector by providing incentives to both employees and employers. It offers financial incentives for EPFO contributions during the first four years of employment. Similar to Scheme A, if an employee leaves within 12 months, the employer must refund the subsidy.
With a budget of Rs 52,000 crore, Scheme B is expected to benefit 30 lakh young people entering the manufacturing sector, encouraging employers to create new jobs.
Scheme C – Employer Support for Additional Hiring
Scheme C aims to encourage additional employment across all sectors. Unlike the other schemes, new employees under Scheme C do not need to be new entrants to the EPFO.
This initiative provides a reimbursement of up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee earning up to Rs 1 lakh per month.
With a budget of Rs 32,000 crore, Scheme C is expected to incentivize the hiring of 50 lakh new employees, providing significant support to employers looking to expand their workforce.
Also Read: New Income Tax Slabs and Rates, Standard Deduction Hike, and Other Changes in Budget 2024
Internship Opportunities in 500 Top Companies
FM Sitharaman also announced steps to boost manufacturing and services and said that internships will be provided to young people in the top 500 companies.
“Our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real life business environments, varied professions and employment opportunities,” said Nirmala Sitharaman in her Budget speech.
“An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to Bear the training cost and 10% of their internship cost from their CSR funds,” the Finance Minister added.
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