₹22,810 crore for wage subsidy via EPFO approved by Cabinet

An expenditure of ₹22,810 crore has been approved by the Union Cabinet for a wage subsidy via employee’s provident fund organization (EPFO) as part of the Atmanirbhar Bharat Rojgar Yojana.

The jobs scheme was announced by finance minister Nirmala Sitharaman on 12 November to spur employment creation in the formal sector, albeit at the lower rung of the salary threshold.

“Cabinet has approved an expenditure of ₹1,584 crore for the current financial year and ₹22,810 crore for the entire Scheme period i.e. 2020-2023," the union government said after the Cabinet meeting on Wednesday. ABRY will also “incentivize creation of new employment opportunities during the Covid recovery phase".

Labour minister Santosh Gangwar told the media that the move will aid formalization in the labour market and his ministry is trying hard to help both workers and enterprises for employment generation. But he did not give a number on how many people have actually lost jobs due to the nationwide lockdown to curb the spread of the pandemic and its impact on businesses.

It has been tweeted that the move may benefit some 5.8 million workers. The cabinet statement did not mention the number of potential beneficiaries though.

Under ABRY, the union government will provide subsidy for two years in respect of new employees hired between 1 October 2020 and 30 June 2021. New employees have been classified as those with a monthly wage of less than ₹15,000 and have not been registered with the EPFO earlier. “Government of India will pay both 12% employees' contribution and 12% employers' contribution…towards EPF in respect of new employees in establishments employing upto 1000 employees for two years," the ministry reiterated.

“Any EPF member possessing Universal Account Number (UAN) drawing monthly wage of less than ₹15000/- who made exit from employment during Covid pandemic from 01.03.2020 to 30.09.2020 and did not join employment in any EPF covered establishment up to 30.09.2020 will also be eligible to avail benefit," the government said.