PF subsidy scheme: 40 lakh beneficiaries so far, against target of 72 lakh by March

According to the labour ministry’s reply to a written question in Lok Sabha recently, generation of new employment under ABRY stood at 39.72 lakh till December 4, compared to government’s target of 71.8 lakh beneficiaries by the end of the current fiscal year.

PF subsidy scheme
The scheme was rolled out in December last year.

Registrations under the Atmanirbhar Bharat Rojgar Yojona (ABRY), a provident fund subsidy scheme aimed at incentivising new recruitment by businesses, is under-performing. According to the labour ministry’s reply to a written question in Lok Sabha recently, generation of new employment under ABRY stood at 39.72 lakh till December 4, compared to government’s target of 71.8 lakh beneficiaries by the end of the current fiscal year.

The Centre has disbursed Rs 2,612 crore to the ABRY beneficiaries till December 4. The scheme was rolled out in December last year. Under the scheme, the government provides subsidy for two years in respect of new employees recruited between October 1, 2020, and March 31, 2022, in the form of 12% employees’ contribution and 12% of employers’ contribution (24% of wage or basic pay plus DA) towards Employees’ Provident Fund (EPF), in respect of new employees earning up to Rs 15,000 per month in every firm employing up to 1,000 people.Also, the government pays employees’ share of EPF contribution (12%) in respect of new employees in establishments employing more than 1,000 employees for two years. The benefit shall be available for two years from the date of registration of the employee.

The beneficiary employee must not have been working in any establishment registered with EPFO before October 1, 2020; they also should not have a universal account number or EPF member account prior to that date. Establishments with less than 50 workers will have to recruit at least two new employees and those with a staff strength of more than 50 must employ at least five new employees for eligibility.

The scheme was first announced on November 12, 2020, as part of the Atmanirbhar Bharat Package 3.0, and the Cabinet gave its approval for the scheme that seeks to arrest the rising unemployment rate on December 9 last year.

Following low utilisation of the fund, the Cabinet, on June 30 this year, extended the terminal date for registration of beneficiaries to avail the benefit for another nine months from June 30, 2021 to March 31, 2022. It also pruned the estimated expenditure to Rs 22,098 crore from the initial estimates of Rs 36,000 crore.

An official statement issued after the June 30 cabinet meeting said, “Consequent upon this extension, it is expected that 71.8 lakh employment will be generated in the formal sector as against the earlier projection of 58.5 lakh. As on June 18, 2021, benefit amounting to Rs 902 crore has been given to 21.42 lakh beneficiaries through 79,577 establishments under ABRY.”
As per labour ministry’s reply on December 13 in Lok Sabha, businesses in Maharashtra have availed the highest benefit under the scheme, till December 4, followed by Tamil Nadu and Gujarat by recruiting 6.5 lakh, 5.35 lakh and 4.44 lakh new employees.

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