NEW DELHI: The government is considering a broad range of incentives for employers who create additional jobs , a senior government official told ET.This is in line with Prime Minister Narendra Modi ’s commitment to create more jobs. A high-level panel of secretaries recently proposed fiscal and monetary incentives for consideration in the budget, the key one being a 30% income tax exemption for units that create an additional 2% jobs, the official said. The base for calculation is proposed to be total emoluments and will cover all kinds of employees.Alternatively, the hirer could be given a 125% rebate on provident fund contributions.Another incentive would be easy, cheap credit through interest subvention. The PM had referred to this in his Independence Day speech last year.“The government would formulate new schemes for new units linking it with employment and assistance of government,” he had said. India has a total workforce of 480 million, of which 6% are in the formal sector and the rest in the informal one. Aside from this, 12 million are added to the workforce every year.Labour bureau data show that only 50% of the population aged 15 years and above is employed, a huge gap between those with jobs and those seeking them. “The labour ministry has proposed various fiscal and monetary interventions as part of the government’s employment-generation strategy and this is likely to find its way in the budget considering that PM Modi had committed to incentivise employment generation in the country,” the official said, asking not to be identified as the matter is under consideration at the highest level.The move could help Indian manufacturing move to labour-intensive sectors from capital-intensive ones, said DK Pant of India Ratings. “This could be one more incentive to manufacturers like so many other incentives but its success will depend on how well the policy is implemented on the ground,” he said, adding that creating more jobs will have ripple effects on the economy.The idea is to extend the scope of such benefits to all assesses and not just restrict it to manufacturers of a certain size.“This will also prompt units to come under the tax net and avail benefits in lieu of providing employment,” he said. Rituparna Chakraborty, president of the Indian Staffing Federation, agreed that it was a good idea to reimburse a certain proportion of employers’ contributions to the provident fund and the ESIC.