Despite the special package for the textile and garment sector unveiled by the Modi government in June last year, fresh employee registrations from the sector under the employees provident fund (EPF) scheme have been just 40,800 so far. Though this is a far cry from what policymakers envisaged, there has been a marginal pick-up in recent months — in the first eight months of the scheme, a little over 1,000 people had got added to the EPFO by textile companies.
The relevant scheme, Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY), was expected to create 1 crore new jobs, increase India’s export of textiles and garments by $30 billion and result in `74,000 crore of investments in the employment-intensive sector over three years.
Under PMPRPY, the government will bear the entire 12% employer’s contribution in the textile sector to the retirement fund for the first three years, against 8.33% for other sectors under the wider Pradhan Mantri Rozgar Protsahan Yojana (PMRPY). Sources in the labour ministry said 2.72 lakh new employees have enrolled with the EPFO since PMRPY was announced in the Budget for 2016-17.
“The PMPRPY scheme has had a slow start, but it is now in picking up and more workers will get enrolled under EPFO in the coming weeks,” said an official.
The official said the rise in number could be attributed to more awareness of the scheme, attractive benefits for the employers and the EPFO’s amnesty scheme that remained valid for six months till June last. Under the amnesty scheme, the government bears employers’ contribution of 8.33% of basic pay to the Employees’ Pension Scheme (EPS) for new employees even if new posts are not created by the firm. The benefit was earlier available only for new posts created.
The government is also likely to unveil a logo and a revamped awareness programme for the PMPRPY scheme soon. After the Cabinet approved the PMPRPY scheme in June last year, three months went by to get other necessary clearances and finally, the enrolment started only from October last year. Fund disbursements by the government started from December only.
PMPRPY scheme for the apparel sector was subsequently extended to the made-ups sector too. A budget of Rs 6,006 crore was approved for the scheme.
With the broader aim of universalising the scheme for all eligible workers, EPFO launched an amnesty scheme first in January for three months to rope in both past and new workers. Later, it extended the scheme for three more months. Under the amnesty scheme, an employer does not have to pay damages and administrative charges for not registering past workers (workers with work experience) with EPFO. Employers need to remit only their contribution and 12% interest on the amount. If employees’ contribution was not collected, this doesn’t have to be paid.