Business new tamfitronics
Finance secretary TV Somanathan says there will be objective criteria to decide candidates selected for the internship scheme. He argues that some of the incentives for employment will pull down entry barriers for first-timers
How is the employment scheme going to be implemented?
There are three direct incentives for employment, two for skilling. In the first three, there are three parts.
One is an incentive which will be paid to every first timer who enters the formal job market. If we receive the CV of somebody with no experience, versus the CV of somebody with experience, the person with experience is preferred. There is a cost to the employer in absorbing a first timer into the organization because that person has to go through the learning curve. By providing a subsidy to the employee, we are encouraging the employer to recruit. The second scheme is also for first timers, but if an employer adds either 50 employees or 25% of the previous year first timers, we are offering a very substantial subsidy over a period of four years, which will be 72% of one a month’s salary. The idea is to again incentivise employment of those who are not able to get employment on their own in the present setup. The third one doesn’t distinguish between first-timers and others, there is an incentive for any employer who creates incremental employment above the baseline and sustains it. Selection for the internship scheme will be done from a list and not in a way that no one gets employment through the backdoor. It’s not that this is a way for a company to take in people it would have placed anyway or recruited anyway and claim subsidy. The list will come from govt from which they will choose. The entire process will be done in an objective manner through a portal and based on open access. Those with lower employability will be chosen and we have a negative list of IITs, IIMs, CAs; any person whose family member with assessed income will be excluded. Govt will soon decide the criteria for selection.
How will education loan subsidy work?
This scheme will be administered by the ministry concerned. Students will apply to the bank, like they do, for getting student loans. In that we open an additional window for those who are in this scheme, but they must be ineligible for benefits under any other govt scheme.
We are four months into the fiscal year, and you have stuck to the capex target for the year. Do you see more demand coming?
I wish to emphasize that the Budget is a continuation of the interim budget that was presented for this year. In Feb, we thought that this level of capex will be appropriate, and we are maintaining that level. I don’t know if we will be able to spend the whole thing or there will be acceleration. It is an aspirational target to reach Rs 11,11,111 crore.
You have had talks with employees on the shape of NPS they would like. What is the feedback and when are you going to give your recommendations?
I can’t comment on the timing. From the staff side the core issue is that they do not want their pension to be at the mercy of fluctuating market forces or market valuations. The second core issue is there should be an element of dearness allowance because there will be inflation, and the real value of the pension must be protected. Then, there is a third one, which is that for those who may not have full service, there must be some kind of base minimum level of pension.
As with most budgets, there’s the complaint that there is nothing for the middle class. How would you respond to that?
Our statistics show that nearly 70% of taxpayers are on the new tax regime and there are substantial concessions for them due to the standard deduction and change in slabs. The incentives given on the employment side, salaries up to Rs 1 lakh is covered and not only for lower pay levels. It will also push employment of middleclass youth. There is subsidy on education loans and several other initiatives including more credit flow to MSME entrepreneurs. They are all in the middle class.
