Economy

Govt to take help from industry chambers to create jobs via new employment scheme

Shishir Sinha New Delhi | Updated on November 13, 2020

Experts view the wage eligibility level of ₹15,000 per month as low; govt says it’s been done after great consideration

The government will seek support from industry chambers for employment generation through the Aatmanirbhar Bharat Rozgar Yojana, announced as part of third round of stimulus.

“The government will write to industry chambers for implementation of the scheme. Chambers will be requested to encourage their members for new job creation with the help of this scheme,” a senior government official told BusinessLine. The proposal will soon be taken to the Cabinet for formal approval and after that the Labour Ministry will come out with detailed guidelines for the scheme.

Also read: Business enterprises to get support through EPFO contribution for job creation

Doubts have been raised considering the wage threshold of ₹15,000 per month to be eligible for getting benefit under the scheme, and experts feel it may not be very helpful considering the lower eligibility criterion. But the official said that this limit has been set after a lot of consideration and it will benefit almost everyone, barring a few large ones. Finance Minister Nirmala Sitharaman had said on Thursday that this scheme covers 99.1 per cent of enterprises. It will cover nearly 65 per cent of formal employees in the first category of the scheme.

The scheme has defined a beneficiary as any new employee joining employment in EPFO-registered establishments on monthly wages less than ₹15,000. EPF members drawing monthly wage of less than ₹15,000 who made an exit from employment during the Covid-19 pandemic from March 1 to September 30 and employed on or after October 1, will also be eligible.

If an enterprise has up to 50 employees as on September 30, it will have to give new job to at least two persons between October 1 and June 30, 2021 to get the benefit of the scheme. If the number of employees is more than 50, then the minimum addition should be five during this period. The Central Government will provide subsidy for two years in respect of the new eligible employees engaged on or after October 1. For establishments employing up to 1,000, the government will bear the total of 24 per cent (employee’s contribution of 12 and employer’s contribution of 12 per cent). In case of establishments employing more than 1,000 employees, the government will pay only the employee’s EPF contribution of 12 per cent. In both cases, enterprises need to be registered under EPFO and the eligible employee should have Aadhaar-seeded account.

Chandrajeet Banerjee, Director General of the Confederation of Indian Industry (CII), feels that this is an excellent way to create demand while also providing an incentive for creation of good quality jobs in the formal sector. “Industry has been happy with the incentive provided under the PMRPY (the PM Rozgar Protsahan Yojana) which expired in March 2019. The new scheme is an improved version and industry is confident of utilising it,” he said.

Published on November 13, 2020

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