New Delhi [India], July 24 : During the discussions on the Union Budget 2024-25 in the Rajya Sabha on Wednesday, Congress leader and former finance minister, P Chidambaram, raised four major challenges facing the economy.
The most significant challenge is unemployment. Data released by the Centre for Monitoring Indian Economy (CMIE) indicates that the unemployment rate for June 2024 is 9.2%. Chidambaram emphasised that the primary challenge for the economy is creating sufficient employment opportunities. He pointed out that the budget's announcement of the employment-linked incentives (ELI) scheme suggests that the Production Linked Incentives (PLI) scheme is not generating the expected employment. He requested the finance minister to disclose the number of jobs created by the PLI scheme.
Chidambaram expressed scepticism about the ELI scheme's effectiveness. "It is an inspiring idea, but it does not inspire confidence that you will be able to place 290 lakh people under the ELI scheme as described," he stated.
He also questioned the Reserve Bank of India's (RBI) report claiming that over 4.67 crore jobs were created in FY24. Citing reports of over 50 lakh applicants for 60,000 police posts in UP, he challenged the RBI's assertion that there is no job crisis in the country.
Chidambaram urged that the issue of unemployment be taken seriously, stating that his party, the Congress, will wait for the success of the proposed ELI scheme.
Finance Minister Nirmala Sitharaman announced in the budget the implementation of three schemes for 'Employment Linked Incentives' as part of the Prime Minister's package. These schemes will be based on enrolment in the EPFO, focusing on recognising first-time employees and supporting both employees and employers.
The Union Finance Minister stated that the scheme would provide a one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one month's salary, in three installments to first-time employees registered in the EPFO, will be up to Rs15,000. The eligibility limit will be a salary of Rs1 lakh per month.
According to the government, the scheme is expected to benefit 210 lakh youth in the country. Going forward, an incentive will be provided at a specified scale directly to both the employee and the employer concerning their EPFO contribution in the first four years of employment. The Finance Minister expects the scheme to benefit 30 lakh youth entering employment and their employers.
The scheme also supports employers by covering additional employment in all sectors. According to the budget announcement, all additional employment within a salary range of Rs1 lakh per month will be counted under the scheme. The government will reimburse employers up to Rs3,000 per month for two years towards their EPFO contribution for each additional employee.
In his speech, the former Finance Minister also raised concerns about inflation, wages, and federalism in the country.
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