In its next stimulus package, the Central government may announce a subsidy for new employment, sources said. This subsidy could be in the form of a Provident Fund contribution up to 10 percent for both employees and employers, the sources added.
The government is planning to relaunch the ‘Pradhan Mantri Rojgar Protsahan Yojana’, which was closed on March 31 last year. Under the new version of this scheme, the government may announce subsidies for new employment for the next two years.
If any new company is registered with the EPFO (Employees’ Provident Fund Organisation) after a certain date, the government will contribute 10 percent of PF of the employer and 10 percent of the new employee.
Even an employee who was registered with the EPFO but exited during the Covid period will be covered by the subsidy if s/he joins a(ny) company. This particular scheme may be opened for those establishments already registered with the EPFO.
According to the proposal, to avail this subsidy, an employee’s salary should not be more than Rs 15,000 per month.
An existing company may be asked to add at least two new recruits if it has 50 or fewer employees. If it has more than 50 employees, then, at least five new recruits may be needed to avail of this subsidy.
For the new company getting registered with the EPFO, the reference base of employees will be treated as zero and employers can avail of the subsidy for all new eligible employees.
The government is considering providing a subsidy for the next two years, although the scheme may be open till the next 6-7 months.