By Dr. Gyan Pathak
India’s only decent job creation flagship programme announced in the Union Budget 2024-25 has gone out of track. Though supposed to be launched on August 1, it is now likely to be launched in January 2025, since details of the programmes are not yet ready. One of the reasons for the inordinate delay is, the Union Ministry of Labour and Employment has told the Department related Parliamentary Committee, was pendency of Union Cabinet’s approval.
Now, the Union Ministry of Labour and Employment is unable to properly implement this programme in the current financial year, and hence it has requested the Union Ministry of Finance to cut its allocation by almost a third.
“We have a limited amount of time this year. Therefore, in Revised Estimate, we have requested for a cut on that amount,” the Union Ministry of Labour and Employment has informed the department related Parliamentary Committee on November 19, as per the parliamentary panel’s report.
The decent job creation flagship programme contains three Employment Linked Incentive (ELI) Schemes for which the Union Budget had allocated Rs10,000 crore. The Union Ministry of Labour and Employment has now urged the Union Ministry of finance to reduce the budget for the ELI Schemes for the current financial year to Rs6,852 crore, the House panel was informed in response to a query.
Apart from citing limited time available in the current financial year, which will end on March 31, 2025, the Union Ministry of Labour and Employment has cited eligibility conditions as major roadblocks to the successful implementation of the scheme in the stipulated time-frame.
The three ELI schemes are yet to get approval from the Union Cabinet and have faced considerable delays with only a quarter to go before the end of the current financial year.
However, the Union Ministry of Labour and Employment has said to the House panel, “The Cabinet note has been submitted. We are expecting to start shortly. The total budgetary allocation for this scheme in the next six-and-a-half years will be Rs 1.07 trillion. This year, Rs 10,000 crore has been given and we expect to spend above Rs 6,000 crore.”
As for the finances and physical targets, the Union Ministry of Labour has said that they expect to spend Rs 3,576 crore on Scheme A, Rs 1,534 crore on Scheme B, and Rs 1,651 crore on Scheme C. The ministry expected 93 lakh workers to get benefit under the three schemes in the current financial year.
Scheme A of ELI is for first-timers, Scheme B is to promote decent job creation in the manufacturing sector, and Scheme C is to incentivise employers across all sectors to create additional employment over and above the prescribed threshold.
Subsidies would be given to the employers and employees both, through membership of the Employment Provident Fund Organisation (EPFO). It was claimed in the Union Budget 2024-25 that the programme would generate 8 million decent jobs, apart from skilling 10 million youth over the next five years.
As per the proposal of the Union government, the proposed amount to be spent under ELI Scheme A from FY25 to FY28 is Rs 22,333 crore, under Scheme B from FY25 to FY31 is Rs 48,326 crore, and under Scheme C from FY25 to FY31 is Rs36,040 crore.
However, after the announcement of the scheme until now, progress remained totally unsatisfactory, despite over two dozen meetings being held between the officials of the Union Ministry of Labour and Employment and other stakeholders from other ministries and departments, and representatives of states, employers’ and labour organisations. Employers were particularly hesitant about joining the schemes.
There were many hurdles in the way. EPFO was to be revamped to implement the ELI schemes the process of which remained very slow. The Parliamentary panel has also noted that the EPFO was still preparing a dedicated IT infrastructure in consultation with the Union Ministry for Electronics and Information Technology (MeitY) for implementation of the scheme that involves preparation of software system/apps for smooth operation of applicant’s registration, disbursal of incentive/subsidy details etc. The parliamentary panel desired that “the process involved be completed at the earliest in a time-bound manner.”
Another hurdle was the payments system framework. Though the Centre had already issued directions to all ministries and departments to ensure payments of subsidies and incentives to beneficiaries of all schemes through Aadhaar Payment Bridge, the progress remained very slow at EPFO level.
EPFO was given direction to ensure that employers complete the first stage of Universal Account Number (UAN) activation through Aadhaar-based OTP by November 30, 2024, starting with the latest joinee employees in the current financial year 2024-25. The second stage of the process was to be included in the Biometric authentication, through face recognition technology, after which employers would be required to complete the process for all employees working with them.
However, the November 30 deadline failed, which was extended on December 4 with the next deadline of December 15. Along with the extension of the deadline to activate UAN, the government has also extended the date for the Aadhaar seeding of bank accounts. On December 11, Union labour secretary Ms Sumita Dawra urged the hesitant India Inc at CII Global Economic Forum to take advantage of the ELI scheme to make themselves more competitive.
One of the chief reasons for delays in implementation of the scheme is that the Union government is yet to announce the details of the ELI scheme which made the employers apprehensive and hesitant about the scheme. Now, the Union Ministry of Labour and Employment has informed the House panel that the schemes do not have cabinet approval yet, which they may get shortly.
Officials in the Union Ministry of Labour and Employment expect the details of the schemes will be ready for notification and implementation by January 2025, only weeks before February 1, 2025, when the next Union Budget 2025-26 will be tabled in the Parliament.
It is very bad news for the workforce in the country, since over 90 per cent of them are working in informal jobs both in informal and formal sectors. They are engaged in low quality and low waged jobs without any social security. Most of them have precarious employment arrangements and nearly 20 percent of the employed as per PLFS government data are not in paid employment. (IPA Service)
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