Indian government announces $11.44 bn Rozgar Yojana to boost jobs

Indian Prime Minister Narendra Modi has announced the Pradhan Mantri Viksit Bharat Rozgar Yojana, with an outlay of ₹1 lakh crore (~$11.44 billion), during his 12th Independence Day address from the Red Fort. The scheme aims to create over 3.5 crore jobs in two years. It will provide incentives of up to ₹15,000 (~$172) in two instalments to newly employed youth and up to ₹3,000 (~$34) month per new employee to employers for generating fresh job opportunities.

Targeting first-time employees registered with EPFO, the scheme will offer one month’s EPF wage up to ₹15,000 in two instalments. Employees with salaries up to ₹1 lakh will be eligible. The first instalment will be payable after six months of service, while the second will be given after 12 months of service and completion of a financial literacy programme.

To encourage savings, a portion of the incentive will be deposited in a savings instrument for a fixed period, withdrawable later. This part is expected to benefit around 1.92 crore first-time employees, Ministry of Labour & Employment said in a release.

Employers, meanwhile, will receive incentives for new employees earning up to ₹1 lakh. The government will provide up to ₹3,000 per month per additional employee for two years, sustained for at least six months. For the manufacturing sector, incentives will extend into the third and fourth years as well. This part is expected to incentivise employers for the creation of additional employment of nearly 2.60 crore persons.

All payments to first-time employees will be made via Direct Benefit Transfer (DBT) through the Aadhaar Bridge Payment System (ABPS), while payments to employers will go directly into PAN-linked accounts. With this scheme, the government aims to boost employment, particularly in manufacturing, while also incentivising youth entering the workforce for the first time. An important outcome will be the formalisation of India’s workforce by extending social security coverage to crores of young men and women.

ALCHEMPro News Desk (HU)