In 2024, the highlight of the budget was the government’s frontal steps to increase formal employment and to skill the youth so they become employable. For FY25, the finance minister said a provision of ₹1.48 lakh crore had been made for education, employment, and skilling.
Budget 2024 included three schemes focusing on employment: Provision of a one-month wage to all persons newly entering the workforce in all formal sectors; a scheme for manufacturing companies where companies must hire 50 first-timers or 25% of their previous year’s EPFO-enrolled employees and the third one involving subsidy only for employers. Apart from this, the PM Internship Scheme was also announced to offer a 12-month internship programme for Indian youth aged 21 to 24.
As February 1 nears, HSBC recommends building on the July 2024 budget.
Here are four ways how Budget 2025 can create jobs, according to HSBC
Tax rationalisation: There has been a demand for lowering personal income tax rates to boost flagging consumption. The brokerage is of the view that this measure would be a tricky one at a time when tax growth is softening and would affect only a small proportion of the population.
It believes the government should be opportunistic and cut energy taxes (i.e. the oil cess), especially when global commodity prices are on a downtrend. That would impact a larger number of people and business activity positively (via softening inflation).
Exports push: HSBC explains that with tariff fears engulfing the world, supply chains may get rejigged once again should high tariffs be levied on economies that run large trade surpluses with the US.
“And this could be an opportunity for India, which was not a primary beneficiary of the previous US trade tensions. But this will need a carefully thought out export strategy, encompassing a lower import tariff structure, more bilateral free trade agreements, easier inward FDI approvals, and improved ease of doing business.
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“The budget should also focus on investment in mid-tech sectors, which are more labour intensive, and where FDI inflows have been weak thus far.
Public capex coordination: The brokerage noted that not only does capex need a push (after election-related weakness in FY25), it also needs to be more diversified.
“Currently 50% of public capex goes to just two sectors—roads and railways. For this to meaningfully expand to areas such as urban transportation, waterways, etc. Better coordination between centre, state and PSE capex may be necessary. A body that specialises in that could add tremendous value.”
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Employment-linked benefits review: The July 2025 budget had many incentives to promote skilling and formal employment (₹2 lakh crore to facilitate employment, skilling, and other opportunities for 41m youth over a period of five years). Six months running, these can now be reviewed and extended, HSBC said.
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