The Atmanirbhar Bharat Rozgar Yojana (ABRY) is a flagship initiative launched by the Government of India to stimulate employment generation in the formal sector. This scheme was introduced as part of the Atmanirbhar Bharat Package 3.0, aimed at incentivizing businesses to create new employment opportunities during the economic recovery phase following the COVID-19 pandemic. Operational from 2020 to 2023, the scheme has been a vital component of India’s efforts to stabilize its economy and provide social security to the workforce.
Objectives of the Scheme
The primary goal of ABRY is to boost employment generation by providing financial incentives to establishments for hiring new employees. The scheme also aims to support workers who lost their jobs during the pandemic by encouraging their reemployment. By subsidizing a portion of employees’ and employers’ provident fund (EPF) contributions, the government aims to reduce the financial burden on establishments and encourage formal sector employment.
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Key Features of ABRY
Operational Period: The scheme is effective for employment created between 1st October 2020 and 31st March 2022, with incentives paid over a period of 24 months from the date of registration of eligible employees.
Eligibility for Beneficiaries (New Employees): The scheme targets two categories of beneficiaries:
First-time Workers: Employees earning a monthly wage of less than ₹15,000 and not registered with the Employees’ Provident Fund Organisation (EPFO) before 1st October 2020. These individuals must join a registered establishment between 1st October 2020 and 31st March 2022 and possess an Aadhaar-validated Universal Account Number (UAN).
Reemployed Workers: EPF members who lost their jobs during the pandemic (from 1st March 2020 to 30th September 2020) and rejoin any EPFO-registered establishment between 1st October 2020 and 31st March 2022.
Government Subsidy:
For establishments employing up to 1,000 workers, the government provides a subsidy of 24% of wages (12% employee contribution + 12% employer contribution).
For establishments with more than 1,000 workers, only the employee’s share of 12% is subsidized. The subsidy is directly credited into the Aadhaar-linked EPFO accounts of eligible employees.
Eligibility Criteria for Establishments
To participate in ABRY, establishments must meet specific criteria based on their workforce size as of September 2020:
Small Establishments (up to 50 employees): They must add a minimum of two new employees over the reference base.
Larger Establishments (more than 50 employees): They are required to add at least five new employees compared to their reference base.
The reference base of employees is determined by the total number of workers registered with EPFO as of September 2020.
Benefits to Employers
The scheme provides significant financial benefits to employers, reducing the cost of hiring new workers. By covering the EPF contributions of new employees for two years, the government eases the financial strain on businesses, particularly small and medium enterprises (SMEs). This measure ensures that employers can focus on expansion and productivity without worrying about additional payroll expenses.
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Implementation Process and Guidelines
The Employees’ Provident Fund Organisation (EPFO) is the implementing agency for ABRY. The following steps and instructions outline the procedure for employers to avail benefits under the scheme:
Registration:
Employers must update Form 5A and disclose their employee reference base through the EPFO Unified Portal.
Employers are required to obtain and verify declarations from new employees regarding their previous EPF membership before registering them under ABRY.
Filing of Electronic Challan cum Return (ECR):
Employers must submit a single ECR for all employees, including new hires, every month. This should be done within 60 days of the close of the wage month.
Any delays in filing the ECR may lead to penalties under Section 7Q, including interest liabilities.
Verification and Accuracy:
Employers must ensure the accuracy of all details provided to claim ABRY benefits. Any corrections or revisions to the ECR are not permitted for enhanced benefits at a later date.
Wage Disbursement:
Employers cannot deduct the employee’s EPF share from their monthly wages under ABRY. Full wages must be disbursed without any such deductions.
Restrictions for Contractor Establishments:
Contractors providing manpower services to principal employers cannot claim the employer’s share of EPF contributions if the benefit has already been claimed by the principal employer.
Key Provisions and Validity
Validity for Registration:
Employers and new employees could register under ABRY between 1st October 2020 and 31st March 2022.
Duration of Incentives:
The incentive is payable for a period of 24 wage months from the date of registration of the new employee.
Monitoring and Compliance:
EPFO monitors compliance with scheme guidelines. Employers are held accountable for any discrepancies or false claims.
Impact of ABRY on Employment Generation
ABRY has been instrumental in promoting formal employment during a critical economic recovery phase. By offering financial incentives, the scheme has encouraged establishments to hire new workers, particularly those affected by the pandemic. The following are some of its significant impacts:
Job Creation: ABRY has contributed to the creation of thousands of new jobs in the organized sector, reducing unemployment rates and supporting economic recovery.
Reintegration of Workers: The scheme has facilitated the reemployment of workers who lost jobs during the pandemic, ensuring financial stability for families.
Support for Small Businesses: SMEs, which were disproportionately affected by the pandemic, have benefited greatly from the subsidy support, enabling them to expand operations.
Boost to Social Security: By incentivizing EPF contributions, ABRY has enhanced social security coverage for the workforce, fostering long-term financial stability.
Challenges and Considerations
While ABRY has achieved significant success, it faces certain challenges:
Awareness and Accessibility: Not all establishments and workers are aware of the scheme’s benefits, which may limit its reach.
Verification and Compliance: Ensuring the accuracy of employer declarations and preventing misuse of benefits remains a critical challenge.
Focus on Wage Thresholds: The scheme excludes workers earning more than ₹15,000 per month, which could limit its impact on higher-income groups.
Conclusion
The Atmanirbhar Bharat Rozgar Yojana is a progressive initiative that aligns with the government’s vision of a self-reliant India. By addressing the twin objectives of job creation and social security, the scheme has played a crucial role in India’s post-pandemic economic recovery. Its emphasis on incentivizing formal employment has not only supported businesses but also empowered workers, ensuring a more robust and inclusive economic landscape.
As India moves forward, the lessons learned from ABRY could shape future policies, ensuring sustained growth and prosperity for all.
