After a lacklustre initial year, the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), the Narendra Modi government’s flagship scheme to promote job creation launched in August 2016, has picked up momentum.
After a lacklustre initial year, the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), the Narendra Modi government’s flagship scheme to promote job creation launched in August 2016, has picked up momentum. While about 6,600 establishments were covered under the scheme at July-end 2017, the number has since shot up to the current strength of over a lakh. The scheme’s beneficiaries were just over 3 lakh one year after its launch, but by March 2018 there was a tenfold jump and the latest figure is 85 lakh.
Under PMRPY, the government bears the entire employers’ entire contribution (12% of basic pay) towards employees’ provident fund (EPF) for workers earning less than Rs 15,000/month during the first three years of employment.
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Clearly, the scheme gained considerable traction since the Budget 2018-19 which increased the government’s EPF contribution to 12% from 8.33% earlier and extended the scheme to all sectors. The textile sector had availed the 12% scheme (Pradhan Mantri Paridhan Rozgar Protsahan Yojana) even earlier but for other sectors, the government contribution was capped at 8.33%.
Of course, the schemes are still a far cry from what the government intended them to be. The textile/garments-specific scheme itself was meant to “create 1 crore jobs, achieve a cumulative increase of $30 billion in the export of textiles and garments and Rs 74,000 crore investments in the employment-intensive sector over three years”.
While the larger PMRPY scheme has gathered pace since the latest budget, the textile scheme has floundered. Less than 800 textile/garment units have enrolled under the sector-specific scheme so far while the number of workers benefitted are just 2.7 lakh (in fact, just 800-odd units got added in the last one year).
In all, the government has spent a total of Rs 2,404 crore for both the schemes since their launch more than two years ago. For PMRPY, the budget 2018-19 allocated Rs 1,652 crore.
Of course, it may not be accurate to count the schemes’ beneficiaries as those who have got new jobs. Sections of these people may have been employed by the firms already and have started getting the EPF benefits thanks to the incentive schemes. “The successs of PMRPY schemes lies in its ability to move out of informal work to formal work by providing them with the much-needed social security safety net. India does not have a job problem, it has a wage problem. Everyone who wants a job, has a job, they just do not have the wage they aspire for. The nudge in the direction of formalisation of the workforce enables the shift in the right direction,” said Rituparna Chakraborty, executive vice-president and co-founder, Teamlease Services.