Atmanirbhar 3.0: Government To Now Make Provident Fund Contributions For These Employees

Union Finance Minister Nirmala Sitharaman announced another set of stimulus measures under the Atmanirbhar Bharat Abhiyaan 3.0 scheme to push economic growth which has been hit by Covid-19 pandemic. Atmanirbhar Bharat Rozgar Yojana is one such scheme to incentivise job creation and create more employment opportunities in the COVID recovery phase. The benefits of this scheme will be given to all the organizations registered with the Employee Provident Fund Organisation (EPFO) which employ new employees or give employment to those who lost jobs between March 1 and September 30.

Under the scheme government will contribute provident fund (employers and employees share at the rate of 12 per cent of wages) for two years to organisations with an employee strength of up to 1,000. For companies employing more than 1,000 employees, the government will provide only employee's contribution at the rate of 12 per cent of wages.

The benefit will be provided to only those employees with wages less than Rs 15,000 per month. The subsidy in the form of PF contributions will be directly credited into the Aadhaar-seeded EPF account (UAN) of the employee.

The scheme will be effective from October 1, 2020 and operational till June 30, 2021.

''Initiatives such as the government bearing the cost of new employees' (including those that lost their jobs during the pandemic) EPFO contribution, extension of production linked incentives, facilitating ease of doing business by relaxation of earnest money deposit requirements for contractors participating in government tenders are steps that can directly or indirectly help job creation,'' said Siddhartha Sanyal, Chief Economist and Head- Research, Bandhan Bank.