Union Budget 2025-26: CII suggests tax incentives, labour code rollout in 7-point agenda for job creation

Confederation of Indian Industry (CII) has suggested a seven-point agenda for the upcoming FY2025-26 Union Budget to boost employment generation, highlighting the need for job creation to drive inclusive growth in the world’s most populous country.

The industry body has proposed measures such as an integrated national employment policy, support for labour-intensive sectors, and the establishment of an international mobility authority to tap overseas job markets, reported PTI.

India, with a median age of 29, is set to add 133 million people to its working-age population by 2050.

CII has called for initiatives like rural internships for college-educated youth to bridge the skills gap and improve the implementation of government programmes.

It urged the government to roll out an integrated national employment policy encompassing various ministry and state schemes to consolidate job data. It also recommended tax incentives to encourage new hiring under a revised income tax provision to replace Section 80JJAA.

To address low female workforce participation, CII proposed constructing dormitories using CSR funds, formalising the care economy, and setting up government-supported creches in industrial clusters.

The industry body also suggested implementing social security for gig and platform workers, and urged faster rollout of labour codes to strengthen the employment landscape.

Highlighting global labour shortages driven by ageing populations, CII advocated for an international mobility authority under the Ministry of External Affairs to facilitate G2G collaborations to help Indian youth tap overseas employment opportunities.

The authority could also work with the Ministry of Skill Development and Entrepreneurship to help develop skill development programmes aligned with global opportunities.

Chandrajit Banerjee, Director General, CII, said, "Coupled with higher employment, India also needs to ensure that productivity goes up. India's Incremental Capital Output Ratio (ICOR) needs to trend down from its present level of 4.1. We need to establish metrics of measuring this. In fact, the Union Budget could set up an expert committee to study this in greater detail and recommend measures on way forward."

Pre-Budget talks

The CII’s proposals also included raising unit costs under housing schemes and introducing time-bound consumption vouchers for low-income households to support demand for essential goods and services.

“Domestic consumption has been critical to India’s growth story, but inflationary pressures have somewhat eroded the purchasing power of consumers. Government interventions could focus on enhancing disposable incomes and stimulating spending to sustain economic momentum”, Banerjee, had said.