Finance Minister Nirmala Sitharaman, on November 12, announced a new employment scheme wherein subsidy will be given to those establishments that make new hires. The Atmanirbhar Bharat Rozgar Yojana is being launched to incentivise the creation of new employment opportunities during the COVID-19 recovery phase, the FM said.
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, the FM said.
Employees contribution (12 percent of wages) and employer's contribution (12 percent of wages) totalling 24 percent of wages would be given to establishments for two years, she said.
Under the Aatmanirbhar Bharat Rozgar Yojana, every Employees' Provident Fund Organisation (EPFO) registered establishment taking new employees would get this subsidy.
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The scheme will cover any new employee joining employment in EPFO-registered establishment on monthly wages less than Rs 15,000. It would also cover EPF members drawing monthly wages of less than Rs 15,000, who made an exit from employment during COVID-19 pandemic from March 1, 2020, and is employed on or after October 1, 2020.
The scheme would cover establishments registered with EPFO if they add new employees compared to the reference base of employees as in September 2020. The condition would be adding a minimum of two new employees for establishments with up to 50 employees.
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Those establishments with more than 50 employees, would have to give a minimum of five new jobs. The scheme would be operational till June 30, 2021.
"Around 99.1 percent of all establishments and 65 percent of all employees in the formal sector are estimated to be covered in the first category, wherein EPF contributions will be given by the government by way of subsidy support," the Finance Minister said.
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Sitharaman also said the Indian economy is witnessing a strong recovery after a long and strict lockdown. Addressing a press conference to announce more stimulus measures to boost growth, she said macro-economic indicators are pointing towards recovery.
The announcements come a day after the government approved a Production-Linked Incentive (PLI) scheme for 10 key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.
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