Article: Budget 2025: A mixed bag for India's workforce

Economy & Policy

Budget 2025: A mixed bag for India's workforce

Budget 2025 has elicited mixed reactions regarding its impact on India's workforce, with some praising the focus on skilling and job creation while others express concerns about funding and implementation. Experts weigh the potential gains and challenges
Budget 2025: A mixed bag for India's workforce

Budget 2025 has sparked diverse reactions, particularly concerning its impact on India's workforce. While some applaud the focus on skilling and job creation, others express concerns about funding and the need for structural reforms. Finance Minister Nirmala Sitharaman's announcements have been met with a mix of optimism and cautious scepticism from industry leaders, HR professionals, and workforce experts. The revised tax regime, raising the zero-tax threshold to ₹12 lakh, aims to stimulate consumption, while investments in AI, deep tech, and infrastructure signal a push for long-term economic growth.  

The government's emphasis on skilling and job creation is a key takeaway. The establishment of National Centres of Excellence for Skilling, coupled with global partnerships, has been lauded as crucial for creating a future-ready workforce, especially in high-demand areas like AI, 5G, and 6G. Ericsson's VP & Head of HR, Priyanka Anand, believes these initiatives will be "instrumental in shaping a future-ready workforce," while Deel's India Country Leader, Sumit Sabharwal, highlights their importance in addressing the skills gap, citing the Economic Survey's finding that only 51% of Indian graduates are employable. The ₹500 crore allocation for a Centre of Excellence in AI for education has also been welcomed, with Sabharwal noting that "over 50% of organizations prefer recruiting AI talent within India."  

However, some experts have expressed concerns about funding adequacy. Pallavi Jha, Chairperson & MD of Walchand PeopleFirst and Dale Carnegie India argues that the ₹500 crore is "insufficient" for India's large demographic dividend. She also points to the "sluggish uptake" of existing programs like the PM Internship Scheme, emphasising the need for "structural reforms" to ensure effective implementation and quality assurance.

The budget's focus on MSMEs and startups has also generated discussion. The ₹10,000 crore Fund of Funds, along with the extended startup incorporation period, has been hailed as positive by many, including Awfis Space Solutions' Chairman & MD, Amit Ramani, who believes it will "foster innovation and solidify India’s position as a global entrepreneurial hub." However, the long-term impact remains to be seen.

Tax reforms, particularly the increased tax-free income threshold to ₹12 lakhs, have been a major talking point. Rahul Goyal, Managing Director of ADP India and Southeast Asia, believes the rationalized TDS provisions and revised tax slabs will "enhance the ease of doing business" and "increase disposable income." He also stresses the importance of businesses proactively preparing for these changes. PeopleStrong's CEO, Sandeep Chaudhary, echoes this, stating that the increased tax-free slab will "boost consumption and investment."  

ALSO READ: Real Wages Plummet Amid India's Growth

The ₹11 trillion infrastructure development allocation has also been welcomed. Ramani believes this will "facilitate industrial expansion and improve the ease of doing business." The focus on gig workers, with plans for ID cards and healthcare access, has been seen as a positive step towards a more inclusive labour market, as noted by Officenet's CEO, Sonali Chowdhry.  

Despite the positives, some experts see challenges. CIEL HR Services' MD & CEO, Aditya Narayan Mishra, while acknowledging the focus on skilling and job creation, emphasizes the need to "bridge the skills gap and create an agile workforce." Mahesh Krishnamoorthy, Managing Director of Core Integra, describes the budget as "conservative" and highlights the need to wait and watch, given the global economic situation. Sumeet Mathur, Senior Vice President & Managing Director, of ServiceNow India Technology & Business Center, believes announcements focused on boosting the IT sector with skilling initiatives will accelerate digital transformation and economic growth. 

Overall, Budget 2025 presents a mixed bag for India's workforce. While the focus on skilling, job creation, and infrastructure is encouraging, success hinges on effective implementation and addressing structural challenges in the labour market. The coming months will be crucial in determining whether the budget's promises translate into tangible improvements.

Read full story

Topics: Economy & Policy, #Budget2025

Did you find this story helpful?

Author

QUICK POLL

What will be the biggest impact of AI on HR in 2025?