FM announces EPFO-Linked schemes: Boost jobs & reward first-timers employee
New Delhi, July 23 2024
These schemes will be based on enrolment in the EPFO, focusing on recognizing first-time employees
The Finance Minister, Nirmala Sitharaman, has announced three new employment-linked incentive schemes as part of the Prime Minister's package, all of which are closely tied to the Employees' Provident Fund Organisation (EPFO).
"Our government will implement the following three schemes for employment -linked incentive as part of the Prime Minister's package — enrollment in the EPF, focus on recognition of first time employees, and support to employees and employers scheme," said Finance Minister, Nirmala Sitharaman.
“The government's commitment to employment and employability is clear with a Rs 1.48 lakh crore provision. This initiative, based on EPFO enrollment, focuses on recognizing first-time employees and includes direct benefit transfers of the first month's salary in three instalments for salaries up to Rs 1 lakh. Special emphasis is placed on the industrial and manufacturing sectors. Additionally, employers will receive incentives for job creation, with the government reimbursing up to Rs 3,000 per month for two years towards EPFO contributions for each new employee,” said Krishnendu Chatterjee, VP and Business Head at TeamLease Services
Detail of schemes
First-Time employees scheme:
Target: EPFO-registered first-time employees.
Benefit: Direct Benefit Transfer of one month's salary (up to Rs 15,000) in three instalments.
Eligibility: Employees with a monthly salary up to Rs 1 lakh.
Expected beneficiaries: 21 million youths.
Manufacturing job creation scheme:
Focus: Incentivizing hiring in the manufacturing sector.
Mechanism: Incentives based on EPFO contributions.
Duration: First four years of employment.
Beneficiaries: 3 million youths and their employers.
Employer Support Scheme:
Aim: Promote additional employment across all sectors
Benefit: Reimbursement to employers up to Rs 3,000 per month for two years
Mechanism: Based on employer's EPFO contribution for each additional employee
Eligibility:Employees earning up to Rs 1 lakh per month
Expected job creation: 1.5 million
Experts believe these schemes will leverage the EPFO system to deliver benefits and track employment. The EPFO registration serves as a key identifier for first-time formal sector employees, ensuring targeted support. The incentives tied to EPFO contributions aim to encourage formal employment and increase participation in the provident fund system.
[The Business Standard]
