'Suspect PLI scheme did not create jobs you wanted': P Chidambaram to Sitharaman on employment scheme in Budget 2024
In Budget 2024, Sitharaman announced an employment-linked incentive scheme to help first-time employees and create more jobs in infrastructure and other sectors.
- Jul 24, 2024,
- Updated Jul 24, 2024 7:41 PM IST
Former Finance Minister P Chidambaram on Wednesday said the Centre's new employment scheme - Employment-Linked Incentive (ELI) - does not inspire confidence as there is no clarity on how it will place 210 lakh youth as stated in the budget document. He also suggested that the Budget did not provide any relief to middle-class and poor people.
"From paragraphs 20-21 read with paragraph 51 of her speech, neither I nor any of my learned colleagues are able to get a whole picture of the ELI. It seems that paragraph 20 talks about the same target industries as paragraph 21. Paragraph 21 talks about the same target industries as paragraph 22. But in paragraph 51, we were suddenly let down when you said only 500 companies are selected. The numbers don't gel. The numbers don't match. ELI is an interesting idea but it does not inspire confidence that you will be able to place 290 lakh people under the ELI that you have described," the former finance minister said.
The senior Congress leader tried to explain the gravity of the unemployment situation in the country by highlighting the huge gap between the number of vacancies and actual applicants. "Now look at the magnitude of the unemployment problem. Uttar Pradesh Police Department conducted an examination for 60,244 vacancies, 48 lakh persons applied and wrote that examination. It was cancelled a couple of days later."
Air India wanted to fill 2,216 vacancies of handymen to do diverse jobs like repair and maintenance, 25,000 people thronged Mumbai airport for a walken interview and the police had been called to restore Law and Order, he said during a discussion on the Budget in Rajya Sabha.
"A private company in Gujarat sought to fill five positions, 1,000 persons barged into that company. Madhya Pradesh advertised for 15 low-skilled government jobs, and 11,000 applications were received - and among them were postgraduates, engineers, and MBAs. I'm sad to say even one of them who had just written an examination to be a judge in the Madhya Pradesh High Court."
Chidambaram expressed his unhappiness at the RBI which recently said there was no jobs crisis in India. "Why didn't anyone from the minister or any officer stand up and say we reject this statement (from RBI). I suggest that unemployment be taken seriously and we will wait for the outcome of your ELI scheme. It is an interesting scheme. At the moment, I'm not convinced. The outcome alone will judge whether your intentions are good and you really want to tackle unemployment."
The Congress leader suggested that the ELI was brought in as the PLI (Production-Linked Incentive) scheme did not yield the desired results. "Earlier, there was a Production-Linked Incentive scheme. When you introduce the employment-linked incentive, it must be for some reason and I suspect the reason was that the production-linked incentive scheme did not create the kind of jobs that you wanted to create. Will the Finance Minister tell this house what is the outcome of the PLI? Once we know the outcome of the PLI, we can look ahead to what can be expected of the ELI," he said.
No relief to people
Chidambaram said no relief was given to common people in the Budget 2024. He said tax relief given the budget will benefit only 2-3 crore taxpayers out of 8-plus taxpayers in the system. "In 2023, the last figure I was able to access, the number of taxpayers is 7.4 crore. It may have increased to 8 or 8.5 crore. Out of that, 65% have zero tax liability - they file a return but pay no tax. Assuming that the 60% remains constant of say 8-9 crore taxpayers, 5-6 crore will have zero tax liability. You have given relief to people who move to the new tax regime. The relief given is between Rs 9,651 to Rs 17,6 51 to 2-3 crore people," he said.
Former Finance Minister P Chidambaram on Wednesday said the Centre's new employment scheme - Employment-Linked Incentive (ELI) - does not inspire confidence as there is no clarity on how it will place 210 lakh youth as stated in the budget document. He also suggested that the Budget did not provide any relief to middle-class and poor people.
"From paragraphs 20-21 read with paragraph 51 of her speech, neither I nor any of my learned colleagues are able to get a whole picture of the ELI. It seems that paragraph 20 talks about the same target industries as paragraph 21. Paragraph 21 talks about the same target industries as paragraph 22. But in paragraph 51, we were suddenly let down when you said only 500 companies are selected. The numbers don't gel. The numbers don't match. ELI is an interesting idea but it does not inspire confidence that you will be able to place 290 lakh people under the ELI that you have described," the former finance minister said.
The senior Congress leader tried to explain the gravity of the unemployment situation in the country by highlighting the huge gap between the number of vacancies and actual applicants. "Now look at the magnitude of the unemployment problem. Uttar Pradesh Police Department conducted an examination for 60,244 vacancies, 48 lakh persons applied and wrote that examination. It was cancelled a couple of days later."
Air India wanted to fill 2,216 vacancies of handymen to do diverse jobs like repair and maintenance, 25,000 people thronged Mumbai airport for a walken interview and the police had been called to restore Law and Order, he said during a discussion on the Budget in Rajya Sabha.
"A private company in Gujarat sought to fill five positions, 1,000 persons barged into that company. Madhya Pradesh advertised for 15 low-skilled government jobs, and 11,000 applications were received - and among them were postgraduates, engineers, and MBAs. I'm sad to say even one of them who had just written an examination to be a judge in the Madhya Pradesh High Court."
Chidambaram expressed his unhappiness at the RBI which recently said there was no jobs crisis in India. "Why didn't anyone from the minister or any officer stand up and say we reject this statement (from RBI). I suggest that unemployment be taken seriously and we will wait for the outcome of your ELI scheme. It is an interesting scheme. At the moment, I'm not convinced. The outcome alone will judge whether your intentions are good and you really want to tackle unemployment."
The Congress leader suggested that the ELI was brought in as the PLI (Production-Linked Incentive) scheme did not yield the desired results. "Earlier, there was a Production-Linked Incentive scheme. When you introduce the employment-linked incentive, it must be for some reason and I suspect the reason was that the production-linked incentive scheme did not create the kind of jobs that you wanted to create. Will the Finance Minister tell this house what is the outcome of the PLI? Once we know the outcome of the PLI, we can look ahead to what can be expected of the ELI," he said.
No relief to people
Chidambaram said no relief was given to common people in the Budget 2024. He said tax relief given the budget will benefit only 2-3 crore taxpayers out of 8-plus taxpayers in the system. "In 2023, the last figure I was able to access, the number of taxpayers is 7.4 crore. It may have increased to 8 or 8.5 crore. Out of that, 65% have zero tax liability - they file a return but pay no tax. Assuming that the 60% remains constant of say 8-9 crore taxpayers, 5-6 crore will have zero tax liability. You have given relief to people who move to the new tax regime. The relief given is between Rs 9,651 to Rs 17,6 51 to 2-3 crore people," he said.