Context:
The government is revising its proposed employment-linked incentive schemes to prevent misuse and fund diversion, ensuring that only genuine employees and employers benefit, sources said.
Key Developments
- The Cabinet has returned the Labour Ministry’s proposal, seeking refinements in the scheme design.
- The Ministry of Labour and Employment is restructuring the scheme to ensure real employment generation.
- Concerns arise from past misuse under the Atmanirbhar Bharat Rojgar Yojana (ABRY), where fake firms were created to access incentives.
Proposed Safeguards
- Aadhaar Linking: While Aadhaar-based verification is included, the government is unsure if this alone can prevent fraud.
- Mandatory Audits: Exploring periodic audits for all beneficiary companies to enhance transparency.
- EPFO Strengthening: Plans are underway to boost EPFO’s capacity to manage additional payrolls under the schemes.
Details of the Employment-Linked Incentive Schemes
- Budget Allocation: ₹1.07 lakh crore earmarked for the schemes over five years.
- Job Creation Target: 29 million jobs expected under the schemes.
- Scheme A:
- Government to reimburse one month’s wage (up to ₹15,000) in three instalments as a subsidy for new workforce entrants.
- Scheme B (Manufacturing Sector Focus):
- Wage reimbursement structure:
- 24% in Year 1
- 24% in Year 2
- 16% in Year 3
- 8% in Year 4
- Employers must hire 50% or 25% of their baseline employee strength under EPFO and retain them for at least 12 months to qualify.
- Wage reimbursement structure:
Future Outlook
- The government aims to finalize the revised structure soon to ensure effective implementation.
- Additional monitoring mechanisms may be introduced to prevent fraud and enhance accountability.
The revised framework seeks to strike a balance between employment promotion and financial prudence, ensuring that incentives reach genuine beneficiaries without fund leakages.
