In the buildup to the 2019 elections the Narendra Modi Government made a landmark decision that could change the narrative in the next couple of years. Narendra Modi government hopes to create 1 crore new jobs by bearing the entire 12 per cent of the basic salary that employers are mandated to make towards pension for the first three years for new employees.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, yesterday approved payment for the entire 12 per cent contribution for first three years for new staff.
“Our government is committed to creating jobs. The scheme which was implemented in 2016 had a provision for the government to pay for 8.33 per cent of the pension contribution by employers.
“We have further expanded the scope of the scheme. It has been decided that for apparel, garment and textile segments, the full 12 per cent of the employers’ pension contribution will also be borne by government,” Labour Minister Santosh Kumar Gangwar said at a briefing today.
Since the launch of scheme in August 2016, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), as many as 30 lakh workers have already benefited, he said.
“We feel that the government’s decision will help create 1 crore new jobs, and we will increase budget provisioning by about Rs 6,500-Rs 10,000 crore under this scheme,” he said.
Employees, who are already reaping the benefit of the 8.33 per cent pension contribution, will be updated to the 12 per cent bracket for the remaining period of their first three years, Gangwar said.
The government bears 8.33 per cent employers’ contribution to the Employees’ Pension Scheme (EPS) for new workers under PMRPY.
Employees who have joined on or after 1st April 2016, having a new Universal Account Number (UAN) with salary up to Rs 15,000 per month, are covered under this scheme.
With this unprecedented move it aims to cover major percentage of youth that have just joined or are about the enter the job market. Although like most policies this appears good on paper, whether it would translate to new jobs remains to be seen.
inputs from PTI