NEW DELHI — The Union Budget 2025-26 should continue to prioritise employment
creation to harness India’s demographic dividend and propel economic growth,
apex business chamber CII said on Sunday.
It highlighted that the Union Budget for FY25 had outlined a
series of initiatives to boost employment generation, including the Employment
Linked Incentive Scheme. The forthcoming Budget could announce further measures
to boost employment generation, the CII statement said.
India is now the world’s most populous country, boasting
1.45 billion citizens. With a median age of just 29 years, India is also a
young country and is set to add 133 million people to its working-age
population by 2050. Mass-scale employment generation is important to engage
this young population productively, and to drive inclusive growth, CII said.
The business chamber has proposed an integrated National
Employment Policy, which could subsume under its ambit, the slew of
employment-generating schemes currently in works by various Ministries.
In addition, the unified policy could also build on the
single integrated employment portal -- National Career Service (NCS) -- wherein
all the data can flow into this from various Ministries and State Portals. In
this context, it is important to look at the development of the Universal
Labour Information Management System (ULIMS) under NCS. This would provide
information about employment opportunities and projections; job classification;
skills demand; and training opportunities aligned with the projections.
As part of its wish list for the Budget, CII has proposed a
new section in lieu of section 80JJAA to encourage new employment. The new
provision should continue as a Chapter VIA deduction from Gross Total Income
which is available even if the taxpayer opts for a concessional tax regime. It
can be made available to any taxpayer who carries on business or profession and
is liable to tax audit. The deduction can be granted for the first three years
of new employment with reference to the salary paid in the respective tax year
but is subject to a ceiling of INR 1 lakh per month, the statement said.
CII has also sought targeted support for
employment-intensive sectors such as construction, tourism, textiles, and
low-skilled manufacturing. To boost exports from labour-intensive manufacturing
sectors, which will lead to employment generation, tariff structures, and
support through programmes like the Production /Employment Linked Schemes, and
the Free Trade Agreements (FTAs) that India is entering, need to be synced, it
added.
Increasing women’s participation in the workforce, which
currently is low, can further boost the Indian economy. New initiatives,
including the construction of dormitories using CSR funds, the formalization of
sectors like the care economy, establishment of government-supported creches in
industrial clusters, could be taken to Increase female labour force
participation, CII said.
According to CII, the government could consider, launching
an internship programme in government offices in rural areas, for
college-educated youth. This initiative would create short-term employment
opportunities in government offices while bridging the gap between education
and professional skills.
Rolling out Labour Codes while ensuring Social Security
coverage to the Gig and Platform workers would further strengthen the
employment landscape, the statement added.
CII has also urged the Government to consider setting up an
International Mobility Authority under the Ministry of External Affairs. This
authority could facilitate government-to-government collaborations to help
Indian youth tap overseas employment opportunities. The authority could also
work with the Ministry of Skill Development and Entrepreneurship to help
develop skill development programmes aligned with global opportunities.
CII Director General Chandrajit Banerjee said, “Coupled with
higher employment, India also needs to ensure that productivity goes up.
India’s Incremental Capital Output Ratio (ICOR) needs to trend down from its
present level of 4.1. The Union Budget could set up an expert committee to
study this in greater detail and recommend measures on the way forward.”
