New Delhi: The Narendra Modi government’s first budget, presented in Parliament on Thursday, underlined the need to meet the aspirations of a young India, for creating jobs and encouraging self-employment and entrepreneurship.

“The country is in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance," finance minister Arun Jaitley said in his budget speech.

The budget proposed to establish a 10,000 crore fund to provide venture capital in the micro, small and medium enterprises, or MSME sector. It will act as a catalyst to attract private capital “by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies," the finance minister said.

The budget also allotted 200 crore to establish a technology centre network to promote innovation and entrepreneurship.

The emphasis on the need to boost employment and meet the aspirations of the young is in line with the promises made by the Bharatiya Janata Party in its campaign for the April-May general elections in a country where more than half the population, according to the census of India, is below 35 years of age.

Jaitley proposed initiating a rural entrepreneurship programme and announced a credit enhancement programme for people from the scheduled castes to enable them to become entrepreneurs and job creators.

“The government proposes to start up a village entrepreneurship programme for encouraging rural youth to take up local entrepreneurship programmes for which an initial sum of 100 crore is to be provided," Jaitley said.

He added that to provide a credit enhancement facility for young entrepreneurs from the scheduled castes aspiring to be part of the middle class, “a sum of 200 crore will be operationalized through a scheme by IFCI (Industrial Finance Corporation of India)," the state-owned financier.

Promoting entrepreneurship and start-up companies remains a challenge. While there have been some efforts in this direction, one principal limitation has been the availability of start-up capital by way of equity to be brought in by the promoters, the budget said.

The budget underlined that small and medium enterprises (SMEs) are the backbone of the country’s economy as they “account for a large portion of our industrial output and employment". It said that the bulk of service sector enterprises were also SMEs.

Most of these SMEs are Own Account Enterprises, a majority of which are owned or run by scheduled caste, scheduled tribe and other backward classes, Jaitley said in his speech.

“Financing to this sector is of critical importance, particularly as it benefits the weakest sections. There is need to examine the financial architecture for this sector," he said, while proposing to appoint a committee with representatives from the finance ministry, ministry of MSME and the Reserve Bank of India (RBI) to give concrete suggestions in three months.

The budget also said that an entrepreneur-friendly legal bankruptcy framework will be developed for SMEs to enable easy exit. “A nationwide district level incubation and accelerator programme would be taken up for incubation of new ideas and providing necessary support for accelerating entrepreneurship," Jaitley said.

The budget stressed the need to convert employment exchanges into career centres for providing information about job availability. “These centres will also extend counselling facilities to the youth for selecting the jobs best suited to their ability and aptitude. I have set aside a sum of 100 crore for this purpose," the minister said.

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