The Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) was launched by the Government of India in 2016 to incentivize employers to create more jobs and offer opportunities to the youth. This scheme primarily targets the unorganized and formal sectors by providing financial support to employers who hire new employees and contribute to their Employees’ Provident Fund (EPF) accounts.
The PMRPY scheme aligns with the government’s mission to increase employment rates and ensure financial security for employees across various sectors. The initiative helps generate employment for Indian youth and encourages employers to join the formal economy, promoting transparency and accountability.
What is the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)?
The PMRPY scheme provides financial incentives to employers for generating new employment, thereby boosting job creation. Under this scheme, the Government of India pays the employer’s contribution towards the Employees’ Pension Scheme (EPS) and Employees’ Provident Fund (EPF) for eligible new employees.
Initially, the scheme was designed to cover only the EPS component. However, in 2018, the government decided to include the EPF component as well, thereby easing the financial burden on employers and encouraging the creation of jobs on a larger scale.
Key Features of PMRPY
- Target Group: Employers in the organized sector who register new employees and contribute to their EPF accounts.
- Government Support: The government contributes both the EPS (8.33%) and EPF (3.67%) portions of the employer’s contribution for new employees for the first three years.
- Direct Benefit to Employees: New employees receive the benefit of regular EPF contributions, offering them social security and retirement benefits.
- Job Creation Focus: The scheme is designed to encourage job creation by reducing employer costs associated with hiring new employees.
Benefits of Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)
The PMRPY scheme provides several benefits to both employers and employees, making it a popular initiative for generating employment opportunities across the country.
1. Financial Incentive for Employers
The primary benefit of the PMRPY scheme is that it provides financial support to employers by covering the EPF and EPS contributions for newly registered employees. This reduces the employer’s financial burden and encourages them to hire more staff, thereby contributing to the country’s employment rates.
2. Social Security for Employees
Employees hired under the PMRPY scheme benefit from the Employees’ Provident Fund contributions, which ensure a secure source of income after retirement. This provides employees with social security, motivating them to join the formal workforce.
3. Increased Employment Opportunities
By lowering the cost associated with hiring new employees, the PMRPY scheme facilitates more job creation. Employers are encouraged to hire more staff as they can save on mandatory contributions, which increases employment opportunities for the youth in both organized and unorganized sectors.
4. Boosts Formal Employment
The scheme promotes formal employment by encouraging employers to register their employees under EPFO. This benefits both the employees, who receive social security, and the government, as more workers are brought under formal employment, ensuring better regulation and transparency in employment practices.
5. Economic Growth
The PMRPY scheme aims to reduce unemployment and boost economic growth by providing incentives for job creation. With more people employed, there is a positive impact on the economy as increased employment leads to higher spending and productivity.
Advantages of Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)
1. Reduces Employer Expenses
The PMRPY scheme reduces employer expenses related to new employees’ EPF contributions. By covering these contributions, the scheme incentivizes employers to increase their workforce without additional financial strain.
2. Simple Registration Process
Employers can easily register for the PMRPY scheme through the Employees’ Provident Fund Organization (EPFO) portal. The straightforward process makes it accessible for employers of various sizes, from small businesses to large corporations.
3. Compliance with Government Policies
Employers participating in the PMRPY scheme comply with government policies related to social security and labor laws. This strengthens the overall employment landscape, promoting organized employment and social security benefits for the workforce.
4. Inclusive of Various Sectors
The scheme is available to employers across different sectors, enabling job creation in a range of industries. This inclusivity ensures that a large segment of the workforce, including those in less-developed sectors, benefit from formal employment.
5. Positive Impact on Youth Employment
The PMRPY scheme is especially beneficial for youth entering the job market, as it creates more opportunities for them to gain employment. This helps address the challenge of youth unemployment and encourages young workers to seek formal employment.
Disadvantages of Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)
1. Limited to Certain Types of Employees
The scheme only applies to newly registered employees who have a Universal Account Number (UAN) linked to the EPF account. This limitation excludes existing employees and may prevent some employers from fully benefitting from the scheme.
2. Employer Dependency
Since the scheme covers only new employees, its success depends on employers actively hiring new staff. In periods of economic slowdown, employers may hesitate to expand their workforce, limiting the scheme’s reach.
3. Short-Term Coverage
The government contribution under PMRPY is available only for the first three years of employment for new employees. While this provides initial support, it may not be enough for employers seeking long-term financial relief.
4. Economic Limitations
During economic recessions, when employers are less likely to hire, the effectiveness of the scheme may decline. The success of the PMRPY scheme is closely tied to the overall economic climate and demand for labor.
5. Awareness Issues
Despite its benefits, there is limited awareness about the PMRPY scheme among smaller businesses, particularly in rural areas. This lack of awareness may hinder the scheme’s ability to reach a wider audience and achieve its objectives.
How to Apply for Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)?
Employers interested in enrolling in the PMRPY scheme can follow these steps:
Step 1: Register on the EPFO Portal
Employers must first be registered on the Employees’ Provident Fund Organization (EPFO) portal. They should have a valid EPF establishment ID and a Universal Account Number (UAN) for each new employee they plan to enroll.
Step 2: Log in to the PMRPY Portal
Visit the PMRPY portal and log in using your EPFO credentials. The portal provides details about the scheme and allows employers to check their eligibility and apply.
Step 3: Provide Employee Details
Enter the required details of each new employee you are registering under the scheme. This includes the UAN, Aadhaar number, and other personal information for verification.
Step 4: Upload Documents
Upload the necessary documents, including proof of employment and details of the employee’s EPF account. Ensure all documents are correctly filled out and meet the requirements specified on the portal.
Step 5: Submit the Application
After entering all details, apply. The portal will confirm the eligibility of the employees, and if approved, the government contribution will be credited to the EPF account of each eligible employee.
Step 6: Track the Status
Employers can monitor the status of their applications and government contributions through the PMRPY portal. The portal provides updates and allows employers to manage their registered employees under the scheme.
The Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) is a strategic initiative aimed at improving job creation in India, especially in the formal sector. By reducing the financial burden on employers and providing EPF contributions, the scheme encourages the hiring of new employees, thereby generating more employment opportunities for the youth.
For employers, the PMRPY scheme is a win-win as it promotes compliance with labour laws and offers financial incentives, making it easier for them to hire additional staff. For employees, the scheme provides much-needed social security and retirement benefits, making it an ideal scheme for those in need of formal employment.
For more information about government schemes that benefit employers and employees alike, you can check out our previous articles on Pradhan Mantri Shram Yogi Maan-Dhan (PM-SYM) and Atal Pension Yojana (APY).
For more details and to apply for the PMRPY scheme, visit the official website.
