Sumita Dawra, Secretary in the Ministry of Labour & Employment, believes that the employment-linked initiative (ELI) schemes—Scheme A for first-timers, Scheme B for job creation in manufacturing, and Scheme C that entails support to employers for additional employment—along with an upgrade of 1,000 ITIs, and internships for 10 million youth in the Top 500 companies, will boost job creation. This has been a key ask of the industry, and the Budget has a number of growth drivers that will generate employment, she says. Edited excerpts:
The main focus of the Budget this time has been the ELI schemes. Could you elaborate on these?
The Budget gives a lot of detail. The three schemes will ride on the Employees’ Provident Fund Organisation (EPFO) and also align with the existing work of EPFO, except for one or two new elements like the direct benefit transfers under Scheme A. The EPFO is already in the process of upgrading its hardware and software. We are working on the schemes, and we should be ready with the draft in a few weeks. Then there has to be inter-ministerial consultation, after which it will go to the Expenditure Finance Committee (EFC) and then to the cabinet for approval. We hope that we will be able to deal with all these procedural aspects by the end of this year.
How confident are you that the ELI will actually lead to job creation as there has been a slowdown in private investment and demand in the last few years?
One needs to put together a number of aspects. First, India is the fastest-growing major economy. The RBI’s KLEMS data for 2022–23 reveals the growth drivers for employment. The services sector has employed about 205 million people—of which almost 55 million have been employed in the last nine years. Construction has added another 23 million. Manufacturing is another big employer. Start-ups have been contributing to employment, the gig economy is coming up, and global capability centres are becoming a source of employment. We see tourism as another potential area. Also, fintech and the financial sector… are expanding. The Budget also has a whole-of-government approach geared towards employment—through schemes for MSMEs, the Mudra loans, foreign direct investment (FDI), industrial parks, and 12 industrial corridors. These are all growth drivers, not just investments. Employment will also come in naturally. And that sets up a virtuous cycle.
Could you throw some light on the internship scheme at the Top 500 companies?
This is dealt with by the Ministry of Corporate Affairs. But there’s a lot of excitement; I would say the initial interaction with industry indicates that they’re happy with the internship scheme, for a couple of reasons. One, the scheme helps create a pool of employable young people—something that industry has always asked for. Two, they will also be able to utilise their own corporate social responsibility funds.
The labour ministry is also working on capturing data on job creation at regular intervals…
We are attempting to capture the data from the different government schemes on employment generation and get a comprehensive view of job creation. We have asked each ministry to undertake a comprehensive review of their systems and how they can improve them. It should take a couple of months to put all this together.
Is there any update on the Labour Codes?
It’s a tripartite consultative process, and it has to be a process of convergence. We are consulting with the labour unions and the employers once again. And, most importantly, we are focussing on the states and Union territories. We have reviewed their draft rules. About 31-32 states, depending on the Code, have already pre-published their draft rules, but the quality of the draft rules needs to be harmonised with the framework of the Labour Codes. The industry cannot face different rules across different states if they have their units across states. And second, there has to be uniformity with the spirit of the Labour Code. We have already had a video conference in June.
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