Job creation will be key thrust area, sops expected in Budget 2017

The government is looking forward to a comprehensive employment generation package for millions of youth that enter the market and this might lead to a big announcement in the upcoming Union Budget 2017 which may include incentives for employment generation in labour intensive sectors and a target for setting up coastal employment zones that would directly link tax incentives to job creation.

According to the officials, the proposal includes incentives for creating jobs in sectors such as leather, electronics manufacturing, and gems and jewellery, on the lines of sops introduced for textiles last year.

"The government is under pressure to speed up the process of job creation in the country because despite several efforts not many employment opportunities are opening up across sectors,” a senior government official, who did not wish to be identified, told ET.

The official also said that the issue of lack of job generation has been raised by several ministers.

In the current scenario, India adds about 12 million people to the job market every year and more than 65% of its population is below the age of 35, a big demographic advantage for the nation that is aspiring to become the human resource capital of the world.

According to the government's fifth annual employment-unemployment survey released in September 2016, about 77% of the households reported no regular wage earning or salaried person.

To deal with it, the labour ministry has proposed that employers across labour intensive sectors be given the option of fixed-term employment, along with waiving their contribution to provident fund and increasing overtime work hours.

"This in turn will push demand in the economy,” an official told ET. This move, if approved will give employers the flexibility to hire workers as per demand for a fixed period of time without compromising on their parity with permanent workers in terms of working hours, wages, allowances and other statutory dues.