This budget has a devil in its implementation details

livemint.com:

₹2 trillion and expected to benefit over 40 million job aspirants, has been designed to nudge and incentivize industry into hiring more labour. This is also the government’s way of acknowledging that unemployment is a problem that demands a policy response. The first scheme envisages payment of one month’s wage, capped at ₹15,000, over three instalments to a first-time employee.

This subsidy, by reducing wage costs, hopes to shift employer preferences to labour over capital. But there’s another catch: employees will get the second instalment only after completing an online financial literacy course. There is no clarity on which course: will it be an existing one, like the one offered by the National Institute of Securities Markets (NISM), or will a new course be developed? It is also unclear who will develop and roll it out.

The NISM course is conducted entirely in English and could be a barrier for many entry-level employees. Then, the onus placed on employers to deter staff turnover—they have to refund the subsidy if an employee leaves before 12 months—is likely to act as a disincentive, even if it is designed to discourage firms from gaming the system. There are other implementation issues.

Success will depend on how the bureaucracy designs the scheme’s nuts-and-bolts, rolls it out and monitors its micro-level performance, which includes, among other things, on-boarding companies and tracking subsidy payments. On the flip side, it will increase the compliance burden for many companies, with their human resources departments forced to liaise with government departments, apart from having to submit to audits and scrutiny. ‘Smooth’ is not the word that comes to mind while envisioning how it will work.