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Explained : All you need to know about the Aatmanirbhar Bharat Rozgar Yojana

Here's a look at the key proposals in the Aatmanirbhar Bharat Rozgar Yojana, how can one avail it, and why some think its impact is likely to be limited

November 13, 2020 / 05:14 PM IST
Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman

With an aim to spur employment generation in the COVID-19 pandemic-hit economy, Finance Minister Nirmala Sitharaman on November 12 announced the Aatmanirbhar Bharat Rozgar Yojana. The scheme offers susbsidies to employers for hiring new employees. It also aims to help those who lost jobs in the wake of the pandemic. 

“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 said.

What is Aatmanirbhar Bharat Rozgar Yojana

The Aatmanirbhar Bharat Rozgar Yojana is aimed at incentivising the creation of new employment opportunities during the COVID-19 recovery phase, wherein the government will give the subsidy for the new employees joining an EPFO-registered establishment with a monthly wage less than Rs 15,000, who lost job due to the COVID-19 pandemic and regained employment after October 1, 2020. 

The Aatmanirbhar Bhart Rozgar Yojana is slated to be operational till June, 30, 2021.


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The new scheme is said to be similar to the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) which was announced in August 2016.

What is the purpose of the scheme

The scheme is expected to provide dual benefit. While on one hand, the scheme is expected to encourage the employers and business establishments to increase the number of workers hired, on the other hand, the scheme will help a large number of job seekers find employment in EPFO-registered establishments. 

“99.1 percent of the establishments will be covered under this scheme and 65 percent of all employees in the formal sector are estimated to be covered, wherein EPF contributions will be given by the government by way of subsidy support,” Sitharaman said.

Government’s contribution 

Under the Aatmanirbhar Bharat Rozgar Yojana, for the 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 a period of two years. 

For establishments employing over 1,000 workers, the government will provide EPF contribution worth 12 percent of the wages. 

The subsidy support will get credited into the Aadhar-seeded EPFO account of the new eligible employee.

Eligibility criteria for the scheme

The establishments which are registered with the EPFO will be eligible for availing the benefits of the scheme if they hire new employees. Moreover, the offer can be extended to only those employees joing the EPFO-registered establishments if their monthly income is less than Rs 15,000.

New establishments which will register for EPFO post the commencement of the scheme will also avail subsidy for all their employees. Establishments with more than 50 employees will be required to hire atleast five new employees and organisations with up to 50 employees will be required to hire a minimum of two employees to be eligible for availing the employment scheme. 

What are some of the concerns raised over the new scheme?

“Given the high stubborn level of unemployment this is a welcome move. However, the benefit will not be availed by many establishments due to the EPFO registration condition. A direct benefit scheme instead of the EPFO channel that the finance minister chose would have been more useful. The impact of the scheme will be limited also because the income cap by the government is fixed at only Rs 15,000, said K R Shyam Sundar, Professor, HRM, XLRI, Xavier School of Managment. 

“Since the EPFO channel subsidy is fixed at Rs 15,000, it will only promote low-income and low-skilled kinds of jobs. The finance minister could have used a graded classification for the scheme instead of one category because the establishments differ in their technology and capacity,” argued Sundar.
Shreeja Singh

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