Cabinet approves Rs 22,810 cr EPF subsidy scheme for job creation
The Cabinet on Wednesday approved a proposal to provide employees’ provident fund (EPF) contribution to those hiring additional workforce for two years. This would cost the government Rs 1,584 crore in the current financial year and Rs 22,810 crore during the entire period, from 2020 to 2023.
The proposal, Atmanirbhar Bharat Rojgar Yojana (ABRY), announced earlier by finance minister Nirmala Sitharman as part of stimulus package, aimed at generating 5-6 million jobs by June next year, sources said.
Under the package, the union government will provide subsidy for two years in respect of new employees engaged on or after October this year and upto June 30, 2021, information and broadcasting minister Prakash Javdekar said.
The government will pay employees as well as employers contribution at 12 per cent of wages each towards EPF in respect of new employees in establishments employing up to 1000 employees for two years.
However, it will pay only employees’ share of EPF contribution at 12 per cnt of wages in respect of new employees in establishments employing more than 1000 employee for two years.
Any EPF member possessing universal account number (UAN) drawing monthly wage of less than Rs 15,000 who made exit from employment during Covid pandemic from March one to September 30 this year and did not join employment in any EPF covered establishment up to September 30, will also be eligible to avail benefit.
EPFO will credit the contribution in Aadhaar seeded account of members in electronic manner. The organisation will develop a software for the scheme and also develop a procedure which is transparent and accountable at their end.
It will work out modality to ensure that there is no overlapping of benefits under this scheme with any other scheme implemented by EPFO.
This scheme is a significant improvement from the previous EPF subsidy scheme announced in March when the government had decided to only foot the EPF contribution of firms with up to 100 workers and where 90 per cent of the workers earned up to Rs 15,000 per month.
A critical aspect of the scheme is employers will have to add at least two new employees if they have total workforce of less than 50 and employers will have to hire a minimum of five new employees if their workforce is more than 50. They will have to maintain this minimum net addition to their workforce each month from October this year to June 2021 to be eligible for the scheme, sources said.
Approved a project to provide submarine optical fibre cable connectivity between mainland Kochi and Lakshadweep islands. (KLI Project). The estimated cost of implementation is about Rs 1,072 crore including operational expenses for five years. The Project would be funded by the Universal Service Obligation Fund.