FY25 Budget shows ways to build an efficient workforce

OUR NATION CONSTANTLY offers us opportunities, both as private citizens and businesses, to shape its growth trajectory.

- VIVEK PRASAD & RAGHAV NARSALAY

We just need an eye to spot them and the commitment to follow through.

One such opportunity that currently beckons us is to find ways of shaping the destiny of our nation through its young demography. At present, India has one of the youngest populations in the world. This makes it our collective responsibility to ensure that this young demography skillfully engages with entrepreneurial and employment opportunities in a world that is becoming increasingly volatile and uncertain.

In this article, we discuss how manufacturers and the youth can collectively leverage and deploy Schemes A and B of the 'Employment-Linked Incentive Schemes' (ELI) outlined in the Union Budget for FY25 towards building a future-ready manufacturing workforce. Scheme A aims to provide one month's wage to first-time employees in all sectors, with a direct benefit transfer of up to ₹15,000 in three installments. Scheme B aims to drive additional employment in the manufacturing sector, providing incentives to both employees and employers with respect to Employees' Provident Fund Organisation (EPFO) contributions in the first four years of employment.

Let us assume that a manufacturing unit employs a youth entering the workforce for the first time at a gross salary of ₹30,000, with 50% (₹15,000) as the basic salary and the remainder packaged as allowances—equivalent to 100% of the basic salary.