The first Union Budget of Modi 3.0 — the first government led by Prime Minister Narendra Modi when his Bharatiya Janata Party (BJP) does not have a majority of its own in the Lok Sabha since 2014 — presented by Finance Minister Nirmala Sitharaman on Tuesday appears to address issues linked to the ruling party’s performance in the parliamentary election held in seven phases between April and June.
Post-election reports suggested that the BJP suffered a loss of over 60 Lok Sabha seats compared to its 2019 performance, when it won its highest number at 303, largely due to anger among the youth, especially job seekers. Consequently, its allies ruling Bihar — the Janata Dal-United — and Andhra Pradesh — the Telugu Desam Party — are key to the BJP-led coalition government at Centre.
And in days following the election results, the JDU and the TDP pressured the BJP for special status for the two states, a demand the Modi government has found difficult to meet citing technical reasons. In return, the government has offered more financial allocation to these two states.
Jobs and youth in Union Budget 2024
In a bid to provide jobs to the youth, Finance Minister Sitharaman raised spending to generate more jobs and spur economic growth, while aiming to appease coalition partners it needs to stay in power. Sitharaman said the government is focused on driving domestic growth through jobs, training and small businesses.
The proposed budget includes a Rs 2 lakh crore or Rs 2 trillion ($24 billion) package for job creation over the next five years, and also raises spending on loans for small and medium-size businesses. This is aimed at targeting 4.1 crore youth.
For FY25, the finance minister said a provision of Rs 1.48 lakh crore has been made for education, employment, and skilling.
The finance minister further proposed to launch an ambitious scheme for providing internship opportunities in 500 top companies to 1 crore (10 million) youth over a five-year period.
Under the scheme, an internship allowance of Rs 5,000 per month, along with a one-time assistance of Rs 6,000 will be provided to youths.
These youths will gain exposure for 12 months to real-life business environments, varied professions and employment opportunities. Sitharaman said companies will bear the training cost. In return, these companies can fund 10 per cent of the internship cost from their CSR (corporate social responsibility) funds.
The Companies Act 2013 states that certain classes of profitable organisations are required to spend at least two per cent of the three-year annual net profit towards CSR activities in a particular financial year.
Employment-linked incentives
Sitharaman also announced plans to launch three schemes for employment-linked incentives.
She said the government will implement three schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package.
“These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers,” Sitharaman said.
Sharing the details, she said a new scheme for ‘first timers’ will “provide one-month wage to all persons newly entering the workforce in all formal sectors”.
The direct benefit transfer of one-month salary in three instalments to first-time employees, as registered in the EPFO, will be up to Rs 15,000. The eligibility limit will be a salary of Rs 1 lakh per month.
“The scheme is expected to benefit 210 lakh youth,” Sitharaman said.
Under the ‘job creation in manufacturing’ scheme, she said the government will incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees.
“An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first four years of employment,” the finance minister said, adding that the scheme is expected to benefit 30 lakh youth entering employment, and their employers.
A third scheme, ‘support to employers’ is an employer-focussed scheme will cover additional employment in all sectors.
All additional employment within a salary of Rs 1 lakh per month will be counted. The government will reimburse to employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee. The scheme is expected to incentivise additional employment of 50 lakh people.
Further, to boost participation of women in the workforce, Sitharaman said the government will facilitate it through the setting up of working women’s hostels in collaboration with the industry, and establishing creches.
The Union Budget also announced a new centrally-sponsored scheme for skilling 20 lakh youth over the next five years. The model skilling loan scheme will be revised to facilitate loans up to Rs 7.5 lakh.
These announcements came a day after the Economic Survey said that the Indian economy needed to generate an average of nearly 78.5 lakh (7.85 million) jobs annually until 2030 in the non-farm sector to cater to the rising workforce.
Bonanza for Nitish’s Bihar in Union Budget 2024
The Union Budget unveiled big-ticket measures for Bihar, proposing a total outlay of over Rs 60,000 crore for various projects, including funding for three expressways, a power plant, heritage corridors and new airports and sports infrastructure.
The finance minister also proposed the development of Vishnupad temple at Gaya and Mahabodhi temple at Bodh Gaya by creating a corridor modelled on the Varanasi-based Kashi Vishwanath Temple Corridor.
“Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported, modelled on the successful Kashi Vishwanath Temple Corridor, to transform them into world class pilgrim and tourist destinations,” Sitharaman said in her budget speech.
Besides, the budget also proposed a comprehensive development initiative for Rajgir, which holds religious significance for Hindus, Buddhists and Jains. “Our government will support Nalanda as a tourist destination besides providing Nalanda University with its glorious stature,” she said.
Sitharaman announced Centre’s support for development of three road connectivity projects — Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, and Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and an additional two-lane bridge over river Ganga at Buxar.
These four projects will have “a total cost of Rs 26,000 crore,” Sitharaman said.
Other bonanza for Bihar — the NDA-ruled state under Chief Minister Nitish Kumar, the JDU leader — include setting up of a 2,400 MW power plant at Pirpainti, in Bhagalpur district, which “will be taken up at a cost of Rs 21,400 crore”.
“New airports, medical colleges and sports infrastructure in Bihar will be constructed,” said Sitharaman.
The Centre would also help Bihar, which has frequently suffered from floods in many of rivers originating from Nepal. “Our government, through the Accelerated Irrigation Benefit Programme and other sources, will provide financial support for projects with estimated cost of Rs 11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects,” Sitharaman said.
While the Centre has denied the Bihar government’s demand for a special status, Sitharaman said, “The requests of the Bihar government for external assistance from multilateral development banks will be expedited.”
Sitharaman also announced a special plan, Poorvodaya, for an all-round development of the eastern region states covering Bihar, Jharkhand, West Bengal, Orissa and Andhra Pradesh.
What’s in Union Budget for Naidu’s Andhra Pradesh
Andhra Pradesh Chief Minister N Chandrababu Naidu — the other pillar on which the Modi Government of the Centre rests — too has been demanding more financial support for his state. In the Union Budget, Sitharaman announced that the central government would provide Rs 15,000 crore financial assistance for Andhra Pradesh for the purpose of development of Amaravati.
She said the NDA government at the Centre is fully committed to financing and early completion of Polavaram Irrigation project, which is considered as a lifeline for Andhra Pradesh and its farmers.
“Our government has made concerted efforts to fulfil the commitments in Andhra Pradesh Reorganisation Act. We are recognising the state’s need for a capital. We will facilitate special financial support through multilateral development agencies. In the current financial year, Rs15,000 crore will be arranged with additional amounts in future years,” Sitharaman said.
Sitharaman further said under the AP Reorganisation Act, for promoting industrial developments, funds will be provided for essential infrastructure such as water, power, railways, and roads and also grants for backward regions of Rayalaseema, Prakasam North coastal Andhra Pradesh, as stated in the Act will be provided.
Earlier on Monday, Union Minister of State for Finance Pankaj Chaudhary told the Lok Sabha that the Modi government had released over Rs 63,000 crore to Andhra Pradesh in the last five years under various centrally sponsored schemes.
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
