Key Highlights:
- The revamped PM Viksit Bharat Rozgar Yojana provides a direct financial incentive of up to Rs. 15,000 to employers for every new employee they register.
- The scheme specifically targets smaller enterprises (EPFO establishments with less than 200 employees) to boost formal job creation at the grassroots level.
- Beyond the incentive, it aims to bring lakhs of new workers into the formal economy, ensuring they receive social security benefits like PF and pension.
NEW DELHI – In a significant push to stimulate formal job creation, the Central Government has supercharged the Prime Minister’s employment generation scheme. Now dubbed the PM Viksit Bharat Rozgar Yojana, the initiative is designed to directly incentivize businesses, particularly smaller establishments, to expand their workforce by offering substantial financial benefits.
The core mechanism of the scheme is straightforward yet powerful. Eligible employers who add new employees to their rolls and formally register them with the Employees’ Provident Fund Organisation (EPFO) can claim a financial incentive from the government. This incentive is intended to partially offset the employer’s contribution to the employee’s EPF account, effectively reducing the cost of hiring.
Who Exactly is Eligible for the Rs. 15,000 Benefit?
The scheme has a clear focus on micro, small, and medium enterprises, which are often considered the backbone of job creation in India. An establishment is eligible if it is already registered with the EPFO and has a total employee strength of less than 200. The incentive is triggered for any new employee with a monthly wage of less than Rs. 15,000 who is hired on or after the scheme’s notification and is registered with the EPFO for the first time.
For these new hires, the government will pay the employer’s full EPF contribution (12% of wages) and the employee’s EPF contribution (12% of wages) for a period of three years. This totals a benefit of approximately Rs. 15,000 per employee per year, directly reducing the financial burden on the business owner.
A Dual Benefit for Employees and the Economy
The advantages of the PM-VBY extend far beyond the immediate cash incentive for companies. For the new employee, it guarantees entry into the formal economy, bringing with it the security of a provident fund, a pension through the Employees’ Pension Scheme (EPS), and insurance cover under the Employees’ Deposit Linked Insurance (EDLI) scheme. This formalization is a critical step towards building a more secure workforce.
For the nation, the program is a strategic investment. By making hiring more affordable, the government aims to accelerate the recovery of the job market post-pandemic and encourage a long-term shift of workers from the informal to the formal sector. This move is expected to widen the social security net and increase the overall productivity of the economy.
Industry experts have welcomed the move, highlighting its targeted approach. “Focusing on smaller enterprises is a masterstroke,” says a labour economist. “These are the entities that are most responsive to such incentives and have the highest employment elasticity. This could lead to a tangible uptick in new EPFO registrations in the coming quarters.”
The application process for the incentive is designed to be seamless and is managed entirely online through the EPFO portal, ensuring transparency and ease of access for employers across the country.
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