Labour and skill ministries' spend to double from previous decade

Govt to spend a lot more on jobs and skills

The labour and skill development ministries of the government will spend nearly double of what they disbursed in the last decade over the next five years, according to a Moneycontrol analysis of Budget documents.

While the ministries had spent Rs 1.03 lakh crore between FY16 and FY24, the Budget lays down a roadmap of spending Rs 2 lakh crore over the next five years.

A major boost is expected to go towards skill development, where spending over the next half a decade is expected to 5.2 times higher than what was spent between FY16 and FY24. On the other hand, labour ministry’s scheme spending will be 1.2 times higher.

Of this Rs 2 lakh crore, the newly launched employment linked incentive schemes will account for over half of the Budget at Rs 1.07 lakh crore, while the internship programme and upgradation of industrial training institutes is set to account for Rs 93,000 crore worth of spending.

The finance minister in her budget speech on July 23 announced the launch of three schemes under the employment linked initiative, with one targeting first-time entrants to job market, another supporting bulk hiring of first timers in manufacturing and the third focused on support to employers.

“I am happy to announce the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 410 million youth over a five-year period with a central outlay of Rs 2 lakh crore,” FM Nirmala Sitharaman had noted.

For FY25, the spending of the two ministries at Rs 25,850 crore (sans establishment expenditure) was already 1.8 times higher than the previous year.

The FY25 allocations are over triple of what the government spent prior to the pandemic in FY20 and five times the spending from a decade ago.

The pace of spending of labour ministry has been higher than skill development.