Union Budget 2024: Govt brings 3 scheme to boost fresh employment via EPFO

New Delhi: The government on Tuesday announced 3 schemes to boost employment through retirement fund body EPFO for new entrants in the organised sector with a total central outlay of Rs 1.07 lakh crore.

In her budget speech in Lok Sabha, Finance Minister Nirmala Sitharaman said, "Our government will implement 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package."

These will be based on enrolment in the Employees' Provident Fund Organisation, and focus on recognition of first-time employees, and support to employees and employers, she said.

For the first-timers, she told the House that Scheme-A will provide one-month wage to all persons newly entering the workforce in all formal sectors.

The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs 15,000.

The eligibility limit will be a salary of Rs 1 lakh per month. The scheme is expected to benefit 210 lakh youth.

The Scheme-B for job creation in manufacturing will incentivize additional employment in the manufacturing sector, linked to the employment of first-time employees.

An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment, she stated.

The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

Similarly, Scheme-C for support to employers, will cover additional employment in all sectors.

All additional employment within a salary of Rs 1 lakh per month will be counted.

The government will reimburse to employers up to Rs 3,000 per month for 2 years towards their EPFO contribution for each additional employee.

The scheme is expected to incentivize additional employment of 50 lakh persons, she added.

The three schemes will have total central outlay of Rs 1.07 lakh crore (Rs 23,000 crore for Scheme-A, Rs 52,000 crore for Scheme-B and Rs 32,000 crore for Scheme-C).

Sitharaman said,"Our government will facilitate the provision of a wide array of services to labour, including those for employment and skilling." A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution, she said.

Open architecture databases for the rapidly changing labour market, skill requirements and available job roles, and a mechanism to connect job-aspirants with potential employers and skill providers will be covered in these services.

ShramSuvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade.

She also told the House that the Committee to review the NPS (New Pension Scheme) has made considerable progress in its work.

"I am happy that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken a constructive approach. A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens," she said.

She also stated that the government will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches.

In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.

According to the latest payroll data, EPFO recorded the highest net addition of 19.50 lakh members in May 2024.

The addition during the month is the highest since the first payroll data was issued in April 2018.

Year-over-year analysis showed a 19.62 per cent growth in net member additions compared to May 2023.

This surge in membership can be attributed to numerous factors, including increased employment opportunities, a growing awareness of employee benefits, and the effectiveness of EPFO's outreach programmes.

The data indicates that around 9.85 lakh new members enrolled during May 2024. There is an increase of 10.96 per cent in the new members from the previous month of April 2024 and an 11.5 per cent increase from May 2023.

A noticeable aspect of the data is the dominance of the 18-25 age group, constituting a significant 58.37 per cent of the total new members added in May 2024, the labour ministry had said.

This is in consonance with the earlier trend which indicates that most individuals joining the organized workforce are youth, primarily first-time job seekers, it had stated.

Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.