Balancing fiscal prudence while strengthening drivers for a self-reliant economy

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₹1.48 trillion for education, employment and skilling is well intended. India as a country of over 1.4 billion people needs more jobs and employable talent. The push to increase participation in the Employees' Provident Fund Organisation (EPFO) is a critical step toward formalizing the labour market.

By encouraging more companies to enroll in the EPFO, the government aims to provide greater social security to employees, which, in turn, makes formal employment more attractive. This initiative is expected to accelerate employment growth, as more workers are brought into the formal sector, benefiting from provident fund contributions and other employment benefits. A particularly innovative aspect of the current policy measure is the focus on internships.

Recognising the future needs of the economy, the government is encouraging the top 500 companies to undertake internship programmes. These programmes are not only aimed at enhancing the employability of young people but are also supported through incentives and the use of Corporate Social Responsibility (CSR) funds. This dual approach of providing practical work experience while still in education, supported by financial incentives, is expected to nurture future talent and also help these youngsters to find their career path.

The estimated fiscal deficit for FY25 has been pegged at 4.9%, lower than the 5.1% announced during the interim budget. The government acknowledged that the fiscal consolidation path had served the country well and it reflects the commitment to maintain this discipline and reduce central government debt progressively. This is a commendable feat.