Written byAnjana Raghav
The government hopes to create 1cr new jobs by bearing the entire 12% of the basic salary that employers are mandated to make towards the pension for the first three years for new employees.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, yesterday approved payment for the entire 12% contribution for first three years for new staff.
"Our government is committed to creating jobs. The scheme which was implemented in 2016 had a provision for the government to pay for 8.33% of the pension contribution by employers," Labor Minister Santosh Kumar Gangwar said.
"We have decided that for apparel, garment and textile segments, the full 12% of the employers' pension contribution will also be borne by the government," he added.
Since the launch of PMRPY in August 2016, as many as 30 lakh workers have already benefited, he said.
"We feel that the government's decision will help create 1cr new jobs, and we will increase budget provisioning by about Rs. 6,500-Rs 10,000cr under this scheme," he said.
The government bears 8.33% employers' contribution to the Employees' Pension Scheme (EPS) for new workers under PMRPY.
Employees, who are already reaping the benefit of the 8.33% pension contribution, will be updated to the 12% bracket for the remaining period of their first three years, Gangwar said.
Employees who have joined on or after 1st April 2016, having a new Universal Account Number (UAN) with salary up to Rs. 15,000/ month, are covered under this scheme.
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