Why in news?
The government announced that the PM Viksit Bharat Rozgar Yojana (PM‑VBRY) would take effect from 1 August 2025. This employment‑linked incentive scheme is intended to encourage the formal sector to create over 3.5 crore jobs by 2027.
Overview
- The scheme will be administered by the Ministry of Labour and Employment with a total outlay of ₹99,446 crore. It replaces the Employment Linked Incentive (ELI) Scheme.
- PM‑VBRY offers incentives both to first‑time employees and to employers.
Benefits for employees
- Workers registering with the Employees’ Provident Fund Organisation (EPFO) for the first time and earning up to ₹1 lakh per month will receive an incentive equivalent to one month’s EPF wage (up to ₹15,000).
- Payment is made in two instalments: after six months of service and after twelve months upon completion of financial literacy training. Part of the incentive is locked into a deposit account to encourage saving.
Benefits for employers
- EPFO‑registered establishments receive incentives for hiring additional workers. Those with fewer than 50 employees must hire at least two extra workers to qualify; those with 50 or more employees must hire five or more.
- The monthly incentive per employee ranges from ₹1,000 for low‑wage workers to ₹3,000 for workers earning up to ₹1 lakh. Employers in manufacturing receive the benefit for four years, whereas other sectors receive it for two years.
- Payments to employers are made directly to their PAN‑linked bank accounts.
Significance
- The scheme aims to reduce unemployment by encouraging formal job creation, particularly in manufacturing.
- By linking incentives to EPFO registration and financial literacy, it seeks to bring more workers into the formal social security net and promote savings.
- Successful implementation will require efficient administration and monitoring to prevent misuse and ensure that job creation targets are met.
