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Ahead of Union Budget 2025-26, the Confederation of Indian Industry (CII) has called for an integrated National Employment Policy, which could subsume under its ambit, the slew of employment generating schemes currently in the works by various Ministries/States. This recommendation is part of the seven-point agenda that CII has submitted in its pre-Budget memorandum to boost employment generation and harness India’s demographic dividend. 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, CII has suggested.
In this context it is important to look at development of 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 to the projections. 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.
The Union Budget for FY25 had outlined a series of initiatives to boost employment generation, including the Employment Linked Incentive Scheme that CII has also been advocating. The forthcoming Budget could announce further measures to boost employment generation. Chandrajit Banerjee, Director General, CII said, “India stands at a unique juncture where its demographic dividend presents a tremendous opportunity to propel economic growth and social transformation.
Employment generation is a critical pillar in this journey. 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, he said. “We need to establish metrices of measuring this. In fact, the Union Budget could set up an expert committee to study this in greater detail and recommend measures on way forward”, Banerjee added.
Second, CII has proposed a new section in lieu of section 80JJAA in income tax law to encourage new employment. The new provision should continue as Chapter VIA deduction from Gross Total Income which is available even if the taxpayer opts for concessional tax regime. It can be made available to any taxpayer who carries on business or profession and is liable to tax audit.
It can be provided that employees who are recruited by the taxpayer as part of split/ reconstruction or business reorganisation will not qualify for the deduction. Third, to stimulate job creation, targeted support to employment-intensive sectors such as construction, tourism, textiles, and low-skilled manufacturing is important. To boost exports from labour intensive manufacturing sectors, which will lead to employment generation, tariff structures, support through programs like the Production /Employment Linked Schemes, and the Free Trade Agreements (FTAs) that India is entering, need to be synced, CII has said.
Four, for the rural areas, government could consider, launching an internship program 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. Five, 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 formalisation of sectors like care economy, establishing of government-supported creches in industrial clusters, could be taken to Increase female labour force participation. Gender-sensitive frameworks in skill development and employment policies can help empower women economically. Six, rolling out Labour Codes while ensuring social security coverage to the gig and platform workers would further strengthen the employment landscape.
Seven, many parts of the world, are facing workforce shortages due to ageing populations, and India should leverage this opportunity. Government could consider setting up an International Mobility Authority under the Ministry of External Affairs, CII has said. Comments.
