The Central government is trying to boost employment opportunities across the country through several initiatives aimed at creating new jobs. Following the introduction of the PM internship scheme in last year’s budget, it is widely expected that this year's budget will see even more emphasis on job creation.
The Confederation of Indian Industry (CII) believes that the govt will announce additional measures to enhance employment generation in the budget for the upcoming fiscal year.
The industry body highlighted that generating large-scale employment is essential to harness the demographic dividend and promote inclusive growth in India, which is the most populous country. The CII further stressed the need for initiatives aimed at making India’s youthful population productive. It noted that the working-age population will increase by 133 million by 2050.
CII’s seven suggestions for employment generation
In its suggestion, the industry body has proposed seven suggestions for utilising India’s demographic advantage. Key recommendations among them include the implementation of a national employment policy, support for labour-intensive sectors, and the establishment of an international transport authority. India has a median age of just 29 and is one of the youngest countries. Leveraging the youthful workforce is crucial for economic growth.
CII has also recommended that the government consider launching an internship program targeting rural areas, particularly in government offices, to provide short-term job opportunities for college-educated youth. This initiative, CII argued, would bridge the gap between education and vocational skills while contributing to the effective implementation of various government programs.
Tax reforms to encourage new jobs
In its suggestions, CII further called for changes in income tax regulations to foster job creation. It proposed to replace Section 80JJAA with a new provision that would continue to offer deductions under Chapter VIA, even for taxpayers opting for a reduced tax regime.
Expert Committee to study Capital Production
Furthermore, CII suggested the establishment of an expert committee to assess and subsequently recommend measures for improving India’s Incremental Capital Output Ratio (ICOR), which currently stands at 4.1. The committee would aim to bring down this ratio and set standards for measuring productivity improvements across industries.