The special package for the textile and garment sector, launched by the government in June 2016 and hailed by many as a potent tool for creation of decent jobs, has met limited success only.
Despite a crucial component of the package being an undertaking that the government will bear the entire 12% of the employer’s contribution to the EPF scheme for the first three years ? against 8.33% for other sectors under the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) till it was enhanced to 12% for all others sectors in the previous Budget ? just 2.65 lakh workers have till date enrolled under the Pradhan Mantri Paridhan Rozgar Protsahan Yojana (PMPRPY) for the textile-garment sector. And not all of these are new employments either.
According to the labour ministry data, just 788 units have availed themselves of the benefit so far. After getting necessary clearances, enrollment under the PMPRPY started in October and, finally, in December, direct credit to the scheme by the government started.
The scheme’s objective was very ambitious: to achieve a cumulative increase of $30 billion in export of textiles and garments and Rs 74,000-crore investments in the employment-intensive sector over three years. The package for the sector included making EPF optional for employees earning less than Rs 15,000 per month.
While the PMPRPY for the textile sector had only little success, the PMRPY, aimed at accelerating job creation in the formal sector for all other sectors, has done relatively better as 75,753 units have availed themselves of the benefits of the scheme and the number of beneficiaries (workers) stood at 60.81 lakh.
Only 6,588 establishments availed the benefit and over 3 lakh workers had enrolled under the scheme till July 30, 2017.
Under the scheme launched in August 2016, the government is obliged to pay the entire employee pension scheme (EPS) component of the employer’s EPF contribution for workers with a salary up to Rs 15,000 per month for the first three years of their employment. Later in the Budget, the government sweetened the scheme by agreeing to pay out employers’ 3.67% into EPF as well.
Of the employer’s share of EPF kitty, 8.33% goes to EPS, 3.67% to EPF, 0.65% towards administrative charges, 0.5% to employees’ deposit-linked insurance scheme and 0.01% for EDLI maintenance.