The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) is a government scheme designed to incentivize employers for the generation of new employment in the formal sector. This initiative provides financial support by covering the employer’s contribution to the Employee Pension Scheme (EPS) and, in some cases, the Employees’ Provident Fund (EPF) for new employees. This piece will explore the scheme’s objectives, eligibility, and operational details.
Objectives of the PMRPY
The PMRPY scheme has the following key objectives:
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To incentivize employers to create new employment opportunities.
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To increase the employment base of workers in establishments registered with EPFO.
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To provide social security benefits to a large number of workers in the organized sector.
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To encourage the employment of semi-skilled and unskilled workers.
Key Features of the PMRPY
The PMRPY scheme operates with the following key features:
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Government Contribution: The government pays the employer’s 8.33% EPS contribution for new employees.
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Additional Support for Textile Sector: In the textile (apparel) sector, the government also pays the 3.67% EPF contribution.
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Targeted at Semi-Skilled and Unskilled Workers: The scheme is applicable to employees with salaries up to ₹15,000 per month.
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Three-Year Benefit: The government’s contribution is provided for the first three years of employment.
Eligibility Criteria
The scheme has specific eligibility criteria for both employers and employees:
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For Establishments:
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Must be registered with EPFO and have a valid Labour Identification Number (LIN).
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Must employ a minimum number of new employees over and above the reference base.
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Must continue to retain the reference base of employees.
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For New Employees:
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Must have joined the establishment on or after April 1, 2016.
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Must not have been a regular employee in any EPFO-registered establishment before this date.
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Must have a new Aadhaar-seeded Universal Account Number (UAN).
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Must have monthly wages below ₹15,000.
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Reference Base for Employees
The reference base for determining eligibility is:
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Existing Establishments: The number of employees for whom the employer deposited the 12% EPF contribution as of March 31, 2016.
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New Establishments: The reference base is considered zero for establishments registered with EPFO after April 1, 2016.
Operational Details
The operational framework of the PMRPY includes the following:
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Electronic Challan cum Return (ECR): Employers must submit monthly ECRs online to EPFO.
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UAN: New employees must have a valid Aadhaar-seeded UAN.
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Online Submission: Employers must submit the PMRPY form online, preferably by the 10th of the following month.
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Government Payment: The government’s contribution is credited after the employer has remitted their share of the EPF contribution.
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Textile Sector Benefit: Establishments in the textile (apparel) sector also receive the 3.67% EPF contribution from the government.
Process Flow
The process flow for availing benefits under PMRPY involves:
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Validation of PAN and LIN: The employer’s PAN and LIN are validated.
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Verification of Employee Details: The new employee’s details are verified against the UAN database.
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Computation of Amount Due: The system computes the amount due for the establishment.
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Release of Government Contribution: The government’s contribution is released after the employer has remitted their contribution.
Benefits of the PMRPY
The PMRPY offers several benefits:
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Incentivizes Job Creation: Encourages employers to hire new employees in the formal sector.
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Reduces Employer Burden: Provides financial support by covering the employer’s share of EPF/EPS contributions.
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Social Security for Workers: Ensures that new employees have access to social security benefits.
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Supports the Textile Sector: Provides additional benefits to establishments in the textile (apparel) sector.
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Promotes Formalization: Encourages the formalization of employment in the country.
Conclusion
The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) is a significant step toward incentivizing employment generation in India. By providing financial support to employers, the scheme aims to create more jobs in the formal sector, enhance social security coverage, and contribute to the overall economic growth of the nation. The PMRPY demonstrates the government’s commitment to promoting employment and empowering the workforce.