Budget 2024: Key Takeaways for Employment Sector That HRs Must Know!

Budget 2024 had a prime focus on initiatives that enhance employment prospects, foster skill development, and provide educational opportunities. As HR professionals gear up for the ongoing financial year, it is essential to understand the key takeaways that will impact the employment sector.

In this article, we will dig into the crucial insights that will help HR departments navigate the evolving landscape and equip their teams with the knowledge needed to succeed in the shifting environment.

Employment Initiatives

An umbrella programme has been introduced that will primarily focus on youth entering the workforce for the first time. These schemes are discussed below:

Scheme A: First-Timers

This scheme aims to support Indian youth entering the formal workforce for the first time. The key highlights of the scheme are:

Eligibility:

• Every person entering the workforce in the formal sector for the first time and drawing a salary up to INR 1 lakh per month.
• The scheme targets those who will be registered with the EPFO for the first time.

Direct Benefit Transfer:

• Eligible employees will receive a one-month wage as a direct benefit transfer, capped at INR 15,000.
• The benefit will be disbursed in three instalments, providing financial relief during the initial months of employment.

Impact:

• Over two crore Indian youth stand to directly benefit from this initiative, enhancing their financial stability and easing their transition into the workforce.

Scheme B: Job Creation in the Manufacturing Sector

The government has introduced this forward-thinking approach, aiming to strengthen job creation in the manufacturing sector and empower its young workforce. The key highlights of the scheme are:

Incentives for First-Time Employees and Employers:

• New employees entering the manufacturing workforce and their employers will receive incentives based on their EPFO contributions during the initial four years of employment.
• These incentives will be provided at a fixed rate, aiming to enhance financial stability for first-time workers.

Impact:

• Over 30 lakh additional youth are expected to benefit directly from this scheme, as they embark on their employment in the manufacturing sector.
• Simultaneously, employers are motivated to expand their workforce, creating a win-win scenario for both parties.

Scheme C: Support to the Employers 

This scheme aims to stimulate employment growth across all sectors. The key highlights of the scheme are:

Eligibility and Scope:

• All additional employment within a monthly salary of INR 1 lakh falls under this scheme. This scheme will encourage employers to hire more employees, which will contribute to overall economic expansion.

Employer Reimbursement:

• Eligible employers will receive reimbursement of up to INR 3,000 per month on the EPFO contribution made by them for each new employee for the next two years.

Impact:

• Over 50 lakh youth are expected to benefit directly from this scheme, fostering job creation and economic vitality.

Tax Regulation Changes

The new tax regime introduced in Budget 2024 includes a few changes. These adjustments aim to simplify compliance for taxpayers. Keeping this in view, the standard deduction of salaried employees has been increased from INR 50,000 to INR 75,000 for those opting for new tax regime.

The budget is being specifically appreciated for abolishing the angel tax, which is believed to be a game-changer for the entrepreneurial IT start-up sector. To deal with the issue of tax evasion, a focus on enhancing transparency and efficiency in tax collection was also highlighted in the budget speech.

New Skilling Programs

Budget 2024 emphasizes new skilling programs. These initiatives aim to equip workers with necessary skills for evolving industries. The government plans to invest in training programs focused on technology and digital skills. This aligns with the increasing demand for skilled labor in various sectors.

Programs targeting underrepresented groups will also emerge. These efforts ensure inclusivity in workforce development. The goal is to bridge skill gaps and prepare workers for future job markets.

The budget reflects the government’s aim to enhance human capital, a crucial aspect of Viksit Bharat, through initiatives in employment, education and skills development. An allocation of INR 1.48 lakh crores for these areas aims to maximise human capital and capitalise on demographic dividend.

Workforce Development Plans

Budget 2024 aims to provide Indian youth with real-life exposure to the corporate world. There are initiatives to provide valuable internship opportunities to over one crore youth within the next five years.

These internships will be provided by the top 500 Indian companies, as identified by the government for this purpose.

Youth participating in this scheme will gain real-life work experience over a period of 12 months. However, these internship opportunities will in no way guarantee any formal employment post completion of the internship.

Financial Support

• Interns will receive a monthly allowance of INR 5,000 during their internship tenure.
• Additionally, a one-time assistance of INR 6,000 will be provided to support their needs.

Cost of Internship

• The concerned companies will bear the training costs for the interns. Furthermore, 10% of the internship cost will be covered by their Corporate Social Responsibility (CSR) funds.

Additionally, the government’s plan to incentivise 30 lakh youth entering the job market by offering a one-month PF contribution is seen as a positive move, easing the transition from education to employment.

Women Empowerment & Skilling Loans

To facilitate higher participation of women in the workforce, the government will set up women’s hostels, and creches in collaboration with the industry.  In addition, the government will collaborate with industry to organize women-specific skill development programmes and will promote market access to women’s self-help groups.

The government will revise the Model Skill Loan Scheme to facilitate skill loans for up to INR 7.5 lakh with the backing from any government-promoted fund. This programme will help over 25000 students achieve the desired skills every year.

Budget 2024 is being called an employment-centric budget that has laid clear focus on the creation of fresh employment and skill development. Hope this article gave you a fair idea about its key HR highlights. For more informative content, stay tuned to Unstop.

Frequently Asked Questions

Q1. What are the key employment initiatives in Budget 2024?

Budget 2024 introduces various employment initiatives aimed at enhancing job creation and skills development. These include funding for vocational training programs and incentives for companies hiring fresh graduates.

Q2. How will tax regulation changes affect HR practices?

Tax regulation changes may require HR to adjust payroll systems and compliance strategies. Staying informed about new tax brackets and deductions is crucial for accurate employee compensation management.

Q3. What impact do budget changes have on employee benefits?

The budget outlines potential adjustments to employee benefits, including health insurance and retirement plans. HR should review these changes to ensure competitive offerings that attract and retain talent.

Q4. Is there financial support available for MSMEs in Budget 2024?

Yes, Budget 2024 allocates funds to support Micro, Small, and Medium Enterprises (MSMEs). This includes grants and loans aimed at fostering growth, which can indirectly benefit employees through job security.

Q5. What should HR focus on regarding employee training post-budget?

HR should prioritize aligning training programs with the new employment initiatives outlined in the budget. This ensures employees gain relevant skills that meet evolving industry demands.

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