Scheme to Cre­ate More Jobs Soon

Labour min moves to in­cen­tivise em­ploy­ers

The Economic Times - - Economy - Yogima.Sharma @times­group.com

New Delhi: The labour min­istry plans to soon re­lease de­tails of a scheme aimed at in­cen­tivis­ing em­ploy­ers to cre­ate ad­di­tional jobs fol­low­ing an an­nounce­ment in the Bud­get. The move is ex­pected to cre­ate more jobs be­sides in­creas­ing for­mal­i­sa­tion as 90% of the coun­try’s work­force is in the in­for­mal sec­tor.

A se­nior gov­ern­ment of­fi­cial told ET that the draft scheme is ready and it could be made pub­lic soon con­sid­er­ing that it was among the key announcements in the Bud­get this year.

Finance Min­is­ter Arun Jait­ley had in his Bud­get speech said that to in­cen­tivise cre­ation of new jobs in the for­mal sec­tor, the Cen­tre will pay the Em­ployee Pen­sion Scheme (EPS) con­tri­bu­tion of 8.33% for all new em­ploy­ees en­rolling in Em­ploy­ees’ Prov­i­dent Fund Or­gan­i­sa­tion (EPFO) for the first three years of their em­ploy­ment. “This will in­cen­tivise the em­ploy­ers to re­cruit un­em­ployed per­sons and also to bring into the books the in­for­mal em­ploy­ees,” Jait­ley had said.

The of­fi­cial cited ear­lier said, “The scheme will be ap­pli­ca­ble to those with salary up to .₹ 15,000 a month to en­sure that jobs are given to semi­skilled and un­skilled work­ers, who need it the most.”

He said .₹ 1,000 crore has been set aside for im­ple­ment­ing the scheme in the first year.

Un­der the Em­ploy­ees’ Prov­i­dent Funds and Mis­cel­la­neous Pro­vi­sions Act, em­ploy­ees con­trib­ute12% of their salary to­wards the EPF, with a match­ing con­tri­bu­tion from the em­ployer. How­ever, 8.33% of the em­ploy­ers’ con­tri­bu­tion sub­ject to a max­i­mum of .₹ 1,250 a month goes to the EPS for so­cial se­cu­rity ben­e­fits of the sub­scriber. “The min­istry will re­im­burse 8.33% to the em­ployer for any new em­ploy­ment gen­er­ated for the first three years to en­sure that jobs are not only cre­ated but also sus­tained over a pe­riod of time,” the of­fi­cial said. The em­ployer will have to show the ad­di­tional hands hired and sub­se­quently claim the ben­e­fit af­ter sub­mit­ting the re­quired proof.

The idea was first mooted by a group of sec­re­taries at the be­hest of PM Naren­dra Modi.

1,000 crore has been set aside to im­ple­ment the scheme in first year

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