The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), announced in the Budget with an allocation of R1,000 crore, will be launched soon. Sources said the Employees’ Provident Fund Organisation (EPFO), the implementing agency for the scheme, is ready with the software for its implementation, but enrollment would start only after the scheme is formally launched.
Under PMRPY, the government will pay for the first three years the employers’ 8.33% contribution to the Employee Pension Scheme (EPS) for new employees, earning up to R15,000 a month. Employers will have to pay the remaining 3.67%. However, the government will bear the entire 12% employers’ contribution towards EPFO for the garment sector. Employees, however, will have to contribute their part in both the cases. The last decade was one of jobless growth. The proportion of persons in the labour force declined from 43% in 2004-05 to 39.5% in 2011-12, with a sharp drop in female participation rate from 29% to 21.9%. This perhaps prompted the government to offer some sops to encourage new employment.
“In order to incentivise creation of new jobs in the formal sector, government of India will pay the EPS contribution of 8.33% for all new employees enrolling in EPFO for the first three years of their employment. This will incentivise the employers to recruit unemployed persons and also to bring into the books the informal employees,” Jaitley had said in the Budget speech.
The scheme has a dual benefit. While it incentivises the employers to increase the employment base of workers in the establishment, it will also help a large number of workers to find jobs in such establishments. Moreover, these workers will have access to the social security benefits of the organised sector.
All establishments registered with the EPFO and also having labour identification number (LIN) would be eligible to avail the benefits under the scheme. This would be available only if the employer has added new employees from April, 2016 onwards. However, for new establishments, PMRPY benefits can be for all new employees.
The employer will continue to get the 8.33% contribution paid by the government for eligible new employees for the next three years, provided they continue in the employment of the same employer. The government will pay its part only after the employers have remitted the 3.67% for all sectors other than textile.
For the textile sector, where the employers are eligible to get the additional 3.67% also, the government’s contribution will come after the employer has credited the 12% contribution of the employees with EPFO.
