By Dr. Gyan Pathak
Prioritizing employment generation and increasing funds for employment guarantee schemes have unquestionably emerged as the top priority during pre-budget consultations of Union Minister of Finance Nirmala Sitharaman for the Union Budget 2025-26, both with the Central Trade Unions (CTUs) and India Inc.
The confederation of Indian Industry (CII) urged the Union Government to prioritize employment generation and formulating an integrated National Employment Policy to unify the numerous employment focused initiatives currently under various ministries and state governments. Their suggestion has acquired a special significance since India has lost the current financial year without the Employment Linked Incentive (ELI) scheme announced in the Union Budget 2024-25 did not even take off yet.
The joint platform of the 10 Central Trade Unions (CTUs), which included AITUC, HMS, CITU, INTUC, AIUTUC, TUCC, SEWA, AICCTU, LPF and UTUC, also demanded enhancement of allocation for the employment guarantee schemes while increasing the work days from 100 to 200. In a separate submission of memorandum, the government supported Bharatiya Mazdoor Sangh (BMS) also suggested broadening the scope of the Mahatma Gandhi National Rural Employment Guarantee scheme while guaranteeing 200 days of work for each family and ensuring minimum wages to MNREGA workers.
Ten CTUs, barring the BMS, suggested the government look for avenues for resource mobilisation, such as from inheritance tax. They also wanted the government to take such steps that would lessen the burden on common people. One of the suggestion was easing the goods and services tax (GST).
The joint platform of 10 CTUs submitted to Union Minister of Finance Nirmala Sitharaman also proposed a raising of income tax rebate for salaried class. They also demanded repeal of the controversial four labour codes, which the Union Government want to implement in the financial year 2025-26. They also demanded scraping of the new pension scheme.
Nevertheless, CTUs seemed disappointed which was obvious in their statement which read, “Not only our suggestions and demands are ignored, the government has been implementing policies diametrically opposite to those suggested by the unions, bypassing all tripartite, bipartite democratic mechanisms and institutions.”
CTUs once again said that the government has been sidelining not only the Central Trade Unions but also the Indian Labour Conference, which is the highest tripartite body of the country on labour issue. “It is going to be one decade since the highest tripartite forum, the Indian Labour Conference (ILC) has been called under the NDA governments,” they said.
The joint platform of the CTUs also called for the setting up of social security fund to provide universal social security schemes to include all unorganized workers. They demanded a minimum pension of Rs 9000 per month linked with Dearness Allowance along with other medical and educational benefits. Even the government supported BMS has suggested a minimum pension of Rs 5000 per month, saying that it could be followed by a 50 per cent of minimum wages notified and link it with variable Dearness Allowance. It is worth noting that India currently pays minimum of Rs 1000 only under the Employees’ Pension Scheme.
The Confederation of Indian Industry (CII) on the other hand urged the Union Government to prioritize employment generation, implementation of labour reforms, and urgent steps for increased women workforce participation in the forthcoming Union Budget 2025-26.
CII has emphasized on the need to align employment generation with higher productivity. It also suggested establishment of an expert committee to analyze productivity metrics and to recommend appropriate solution to the problem.
CII also advocated for a single integrated employment portal under the National Career Service (NCS), enhanced with a Universal Labour Information Management System (ULIMS). The idea was that such a system would be able to provide detailed insights into job opportunities, skills demand, and training programmes aligned to future projections for the country.
The confederation representatives also emphasized on boosting job creation, for which they suggested a new section replacing Section 80JJAA to incentivise new employment. It was a clear case of theirs not being happy with the ELI scheme announced in the Union Budget 2024-25, but is yet to take off. Neither the government is ready with ELI scheme details, nor the EPFO is ready with the digital system it required to implement the scheme. Moreover, employer companies are still hesitant to join the scheme.
Their proposal includes a tax deduction for business hiring new employees, applicable for the first three years of employment, capped at Rs1 lakh per month per employee. They also demanded targeted support for labour-intensive sectors such as construction, textiles, tourism, and low-skilled manufacturing.
CII has made special emphasis on aligning tariff structures, Production Linked Incentive (PLI) schemes, and Free Trade Agreements (FTAs) to boost export from labour-intensive industries. They said that such steps would generate employment.
Federation has also suggested internship programme in government offices, formalisation of care economy, economic empowerment of women, and addressing low female workforce participation in the country.
CII also recommended rolling out labour codes with a focus on providing social security for gig and platform workers, further strengthening the employment landscape.
Union Budget 2025-26 therefore needs balancing act on implementation of labour codes, while focussing on generation of decent jobs, social security for workforce, and increased funding for employment guarantee scheme for the rural areas. To give relief to urban workforce, the Budget must also launch urban employment guarantee scheme. (IPA Service)
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