Sources said the government is likely to extend the provident fund subsidy scheme, which aims to encourage businesses to hire new recruits for the current six months from June 30 to curb rising unemployment.
If the plan expands, a large segment of the country’s industrial and commercial enterprises and relatively low-income new employees will join them until the end of the 2021 calendar year. Specific benefits can be availed for two years from the date of joining.
The relatively low utilization of funds earmarked for this project is less than Rs 100 crore so far and the Rs 22,810 crore approved by the Cabinet for the period 2022-23 is one reason for this expansion.
The Atmanirbhar Bharat Rojgar Yojana (ABRY) scheme was first announced on November 12, 2020, as part of the Atmanirbhar Bharat Package 3.0 and was approved by the Cabinet on December 9.
Under the current scheme, 12 percent of the employee contribution and 12 percent of the employer’s contribution (24 percent salary or basic salary plus DA) to new employees hired from October 1, 2020, to June 30, 2021, will be given to employees earning up to Rs 15,000 per month in a company with up to 1,000 employees.
Employees Provident Fund contributes (12 percent) to government employees for new employees in companies that employing more than a thousand people for two years. The benefit is available for two years from the date of registration of the employee.
The beneficiary employee should not have worked in any of the establishments registered with EPFO before October 1, 2020. They must not have a universal account number or EPF member account before that date. Companies with less than 50 employees must hire at least two new employees, and those with more than 50 staff must hire at least five new employees to qualify. The second wave of Covid led to a sharp rise in the Indian unemployment rate. It rose to 11.9 percent in May. It was 7.97 percent last month.
According to CMIE, the monthly unemployment rate has not exceeded at least double digits since January 2016, except in April, May, June last year, and May this year. In April last year, it was 23.52 percent. Locked down, but started to fall from next month. The unemployment rate in the country was 21.73 percent in May last year.
The formalization of employment is a centralized sector of the Narendra Modi government, for example, which has sought to expand the EPF base through a variety of subsidy schemes, including the Pradhan Mantri Rojgar Protsahan Yojana for the textile and textile sector.
However, 20 official documents show that the process of formalizing jobs with the necessary social security protections has suffered a major setback due to the pandemic from the speed at which it was collected for a few years from 2020 onwards.