Union Budget 2024: Education loan relief; focus on skills, jobs, internships; Rs 1.48 lakh crore outlay

NEW DELHI: Union finance minister Nirmala Sitharman, during her union budget 2024-25 speech on Tuesday, announced a slew of new initiatives and revisions of existing ones for students and the newly-employed. Education loans to the extent of Rs 10 lakh will now be supported; 1 lakh students will receive e-vouchers toward annual education loan interest subvention of 3% of the amount. The model skill loan scheme is also being revised; plus, first-time workers in the formal sector and their employers will be supported.

Presenting her seventh consecutive budget, Sitharaman announced an outlay of Rs.1.48 lakh crore for education, employment and skilling. In her Union Budget speech 2024, she said the government is now turning its attention towards “employment, skilling, medium and small enterprises (MSME) and middle class” for the next five years.

Terming “employment and skilling” as Modi government’s “Priority 2”, the minister announced a host of schemes, such as one time wage to all first-time workers entering the workforce, with a direct benefit transfer of up to Rs.15,000; job creation in manufacturing sector; education loans up to Rs 10 lakh; new courses for skilling; and over 1,000 new Industrial Training Institutes (ITIs).

Budget 2024-25 focus

“The focus of the interim budget was on the poor, women, youth and farmers. PM Garib Kalyan Anna Yojana was extended by 5 years, benefitting more than 80 crore people. With the budget now we are turning attention towards employment, skilling, MSME and middle class,” said Sitharaman while presenting the union budget 2024.

The finance minister announced an outlay of over Rs 2 lakh crore for the five PM schemes which aims to benefit 4.1 crore youth. “We are announcing an allocation of Rs 1.48 lakh crore for education, employment and skilling,” said Sitharaman.

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Employment and skilling

Sitharaman announced three employment linked schemes as part of the Modi government’s budget outlay for 2024-25.

The first scheme is based on the enrolment in Employment Provident Fund Organisation, (EPFO) and recognition of first-time employees and support to employers. “The scheme will provide one month's wage to first time employees entering the workforce in formal sectors, up to Rs 15,000 in three instalments. The eligibility limit will be a salary of Rs 1,00,000 per month. This scheme is set to benefit 2.10 lakh youth,” she said.

The second scheme focuses on job creation in manufacturing, under which incentives will be provided to employees and employers in the first four years of employment. “The scheme will benefit 30 lakh youth entering employment,” said Sitharaman.

The third scheme will provide support to employers. “Support to employers will cover additional employment in all sectors within a salary of Rs 1,00,000 per month. The government will give Rs 3,000 per month to the EPFO. This is expected to support the additional employment of 50 lakh people,” said Sitharaman. The new employment generation scheme will be operated by the ministry of labour and employment and has been allocated Rs 10,000 crore.

The Ministry of Skill Development and Entrepreneurship has seen its allocation rise from Rs 3,520 crore in the interim budget, which was similar to last financial year’s allocation, to Rs 4.520 crore. The Rs 1,000 crore increase has gone entirely to the New Industrial Training Institute (ITI) Upgradation Scheme.

The government will be supporting women’s participation in the workforce by setting up working women’s hostels and creches. The government also plans to start a women specific skilling programme.

New scheme for skilling

Sitharaman also announced a new centrally sponsored programme which she said will result in the skilling of 20 lakh youth over a period of five years.

“1,000 industry training institutes (ITI) will be encouraged in hub and spoke arrangement.

The new courses will be aligned with the needs of the industry. Model skill loans will be revised for loans up to Rs.7.5 lakh with a guarantee from a government promoted fund expected to help 25,000 students every year,” said Sitharaman.

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Education loan budget

The education loan subsidy scheme is now part of the PM Uchchatar Shiksha Protsahan (PM-USP) Yojna whose total allocation is exactly the same as in the interim budget, Rs 1,558 crore.

“For the youth who have not been able to benefit from any of the government schemes will now be able to get a loan up to Rs.10 lakh for studying in domestic institutions. E-vouchers for this purpose will be given to 1 lakh students every year for annual interest subversion of 3% of loan amount,” said Sitharaman.

Internship Opportunities for Youth

The budget also announced internship opportunities in 500 top companies to one crore youth in five years.

“They will gain exposure for 12 months in real-life businesses. An internship allowances of Rs 5,000 per month and a one-time assistance of Rs 6,000 will be paid. Companies will be expected to bear the training cost and 10% of the internship cost,” she said.

The new internship scheme will be operated by the ministry of corporate affairs and has been allocated Rs 2,000 crore for the year.

Allocations to major schemes under the departments of school education and literacy and higher education remain broadly the same as in the interim budget announced in February. That trend holds even for schemes run by the ministries of social justice and empowerment, health, tribal affairs and women and child development which have not seen substantial changes from their respective outlays in the interim budget.