Building a brave new workforce!
The Economic Survey 2023-24 highlights a notable decline in unemployment rates, thanks to improved labour participation, especially among women. This positive trend opens up significant opportunities to harness the demographic and gender dividend. In response, the Finance Minister has prioritised education, employment and skill development, recognising the need for substantial reforms to bridge existing gaps.
Prioritising Skilling and Employment
The Economic Survey underscores the importance of skilling for economic growth, benefiting both individuals and employers. While the market can address many skilling challenges, government intervention is crucial to remove regulatory barriers, such as land availability for training facilities. The budget has allocated Rs 1.48 trillion towards education, employment and skilling of youth, a 30 per cent increase from the previous allocation of Rs 1.13 trillion. This substantial investment demonstrates the government’s commitment to tackling unemployment. Additionally, 1000 ITIs will be upgraded using a hub-and-spoke model. Financial support for loans up to Rs 10 lakh for higher education and skilling loans up to Rs 7.5 lakh will significantly enhance access to education and skill development for 100,000 students annually.
The Economic Survey also highlights that job creation primarily occurs in the private sector, which has seen profitability reach a 15-year high in FY24, with profits quadrupling between FY20 and FY23. Despite this, businesses often hesitate to invest due to uncertain demand. Balancing capital and labour investment is crucial for long-term corporate growth and social stability. The FM has unveiled a comprehensive Rs 2 trillion package under the Prime Minister’s scheme spread over a five-year period. This initiative aims to incentivise job creation and skill two million youth, targeting 4.1 crore youth over the next five years. Key components include:
- First Timers: Offers up to Rs 15,000 in three installments for first-time employees registered with the Employees’ Provident Fund Organisation (EPFO), encouraging new workforce entrants.
- Job Creation in Manufacturing: Provides incentives for EPFO contributions for both employees and employers in the first four years of employment, fostering job creation in the manufacturing sector.
- Support to Employers: Reimburses up to Rs 3000 per month for two years towards EPFO contributions for each additional employee, easing the financial burden on employers and promoting workforce expansion.
Supporting Women in the Workforce
IE has pointed on the alarming trend of decreasing participation of women in the workforce. They form half of the population and are an important aspect to power up India’s growth engine. Leaving them behind in the economic cycle, would hinder the nation’s development targets. IE in its March 2023 issue had highlighted the organisational, societal and policy changes that must be implemented on war footing to induct more women in workforce. The budget also focuses on the same. Initiatives include establishing working women hostels and crèches in collaboration with industry partners, organising women-specific skilling programmes to enhance their employability and promoting market access for women-led self help group (SHG) enterprises, empowering women economically and socially.
~ Authored by Pragya Panda
