Union Labour and Employment Minister Santosh Kumar Gangwar on Thursday said the government expects to generate nearly one crore new jobs by bearing the entire contribution of employers towards the Employees' Pension Scheme (EPS) of new employees in the informal sector for the first three years.
"Yesterday, it was decided that the entire 12 per cent will be bored by the government... It is a major step and we expect it to create nearly 1 crore new employment opportunities," he said at the briefing on cabinet decisions.
The minister said that government will increase budgetary provisioning of the scheme -- Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) -- by around Rs 6,500-Rs 10,000 crore.
On Wednesday, the Cabinet Committee on Economic Affairs (CCEA) gave its approval for enhancing the scope of PMRPY.
According to the CCEA decision, the government "will now contribute the employer's full admissible contribution for the first three years from the date of registration of the new employee for all the sectors including existing beneficiaries for their remaining period of three years".
"The informal sector workers would get social safety net and there would be more job creation," a statement from the CCEA.
"Till now, the scheme has produced quite encouraging results and have added about 31 lakhs beneficiaries to the formal employment involving an expenditure of more than Rs 500 crore."
The scheme has been in operation since August, 2016, under which the government till now was paying the 8.33 per cent contribution of employers to the EPS in respect of new employees, who have joined on or after April 1, 2016, having a new Universal Account Number (UAN), with salary up to Rs 15,000 per month.
As per the scheme, the employers are incentivised for increasing the employment base of workers in the establishments, and on the other hand a large number of workers will find jobs in such establishments.
"A direct benefit is that these workers will have access to social security benefits of the organised sector," the statement said.
Disclaimer: No Business Standard Journalist was involved in creation of this content