The Union Budget 2021, presented right after the introduction of the Employees Provident Fund (EPF) subsidy scheme, also known as the Atmanirbhar Bharat Rozgar Yojana, was expected to set aside a significant portion towards the scheme.
However, as per the Budget documents released on February 2, the EPF subsidy scheme, announced in November 2020, has been allotted only Rs 3,130 crore against the proposed Rs 22,810 crore over a period of three years.
The allocation for the scheme was announced in the Union Budget 2021-22 presented by Finance Minister Nirmala Sitharaman on February 1.
Noting the reasons for a lower-than-expected allocation, Prashant Singh, Vice President and Business Head- Compliance and Payroll Outsourcing, TeamLease Services, pointed out that the government had been announcing multiple subsidies and packages in the last few months to boost employment, economy, and for business revival.
"A low budget allocation in the initial phase of a scheme is expected as the finer details of the initiative take time to be established. Moreover, the performance of a scheme can be assessed only after some time," Singh opined.
Finance Minister Nirmala Sitharaman on November 12 announced the Atmanirbhar Bharat Rozgar Yojana, aimed at incentivising the creation of new employment opportunities during the COVID-19 economic recovery phase.
“Under the new scheme, the government will provide subsidy by way of EPF contributions for all new eligible employees. The subsidy will be credited upfront in Aadhaar-seeded EPFO accounts,” Sitharaman had announced while unveiling the scheme.
Under the Atmanirbhar Bharat Rozgar Yojana, for establishments employing up to 1,000 workers, the Central government will provide employee’s contribution at 12 percent of the wages and employer’s contribution at 12 percent of the wages thereby covering a total of 24 percent of the wages.
For establishments employing over 1,000 workers, the government proposed to provide EPF contribution worth 12 percent of the wages.
An employee drawing a monthly wage of less than Rs 15,000, who was not working in any establishment registered with the Employees’ Provident Fund Organisation before October 1, 2020, will be eligible for the scheme.