Govt Considers Employment-Linked Incentive Scheme In Upcoming Budget

ENA MSME 2024-07-15 15:21:38 New Delhi, Jul 15 (KNN) The government is reportedly contemplating the introduction of an employment-linked incentive scheme (ELIS) in the upcoming Budget 2024-25, aimed at stimulating job creation in labour-intensive sectors. Sources indicate that the proposed scheme would share similarities with the existing production-linked incentive (PLI) scheme. According to insider information, the labour ministry has put forward this recommendation to the finance ministry. The ELIS is expected to target sectors such as toys, textiles and apparel, furniture, tourism, and logistics. Federation of Indian Micro, Small & Medium Enterprises (FISME) had made a forceful presentation before Finance Minister during pre-budget consultations for a sector agnostic, employment based PLI scheme for MSMEs. MSMEs are employment intensive and not investment and therefore the current PLI schemes which are based on investment largely exclude MSMEs sector, says President FISMR Sandeep Jain. While specific details of the incentives remain undisclosed, sources suggest they may include tax relief for corporations adding new workers and temporary wage subsidies for additional jobs created. Experts believe that such financial assistance to labour-intensive sectors could significantly impact the employment landscape and boost production. Akhil Arora, Partner, Grant Thornton Bharat, stated, This may incentivise companies to invest in expanding their workforce, ultimately lowering unemployment rates and boosting overall economic production. The proposal comes amid criticism faced by the National Democratic Alliance government over an alleged job crisis in the economy. Recent reports have suggested that India's recent economic growth has been largely jobless. A study by the International Labour Organisation (ILO) highlighted a disparity between economic growth and employment generation. Between 2012 and 2019, while the gross value added (GVA) grew at an average annual rate of 6.7 per cent, employment growth was nearly stagnant at 0.01 per cent. Industry experts have called for prioritising formal employment generation, particularly in the MSME sector. Lohit Bhatia, President, Indian Staffing Federation (ISF), emphasised the need for schemes that integrate social security and benefits, suggesting expanded coverage of EPFO and ESIC for MSME employees. The ISF has also proposed enhanced income tax benefits for employers hiring first-time formal employees, especially women, under Section 80JJAA of the Income Tax Act. As the budget announcement approaches, stakeholders await further details on the potential implementation of the ELIS and its impact on job creation and economic growth. (KNN Bureau) 38598 https://knnindia.co.in/news/newsdetails/msme/govt-considers-employment-linked-incentive-scheme-in-upcoming-budget 2024-07-15 15:21:38 knnindia.co.in Govt Considers Employment-Linked Incentive Scheme In Upcoming Budget