These companies allegedly duped the system by taking financial incentives for Pradhan Mantri Rojgar Protsahan Yojana, which was meant to bring new employees in the formal economy
Government has found 9 lakh beneficiaries from as many as 80,000 companies took benefit of Centre’s job formalisation scheme, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), even though they were not eligible for it, leading to around Rs 300 crore worth of loss to the exchequer.
A report published in the Business Standard said these companies allegedly duped the system by taking financial incentives for the scheme that was meant to bring new employees in the formal economy. The PMRPY scheme incentivises employers registered with the Employees’ Provident Fund Organisation (EPFO) for job creation by paying the full contribution of employers to the Employee Pension Scheme (EPS) and Employees’ Provident Fund (EPF).
Through the scheme, the Centre pays 8.33 per cent of the EPS contribution of the employer for new jobs. The scheme incentivises employer for increasing the employment base and a large number of workers find jobs that give them social security benefits of the organised sector.
The government through the EPFO has already recovered around Rs 222 crore after blocking the provident fund accounts (over 9 lakh) in question, the daily said. The scheme was launched in August 2016 and was meant only for new employees who were hired after April 1, 2016. As per the report, around 8,98,576 employees from 80,000 companies were found to be taking benefit of the scheme till July 16, 2019, even though they had a PF account before that. In total, it was around 7 per cent of the total 1.2 crore employees who wrongly benefitted through the scheme till then.
The daily also quoted officials saying the discrepancies might have occurred due to “lack of knowledge” among employers, while employers blamed the government for lack of checks and balances to validate employees’ claims to avoid duplication of a PF account.
The PMRPY scheme is only targeted for employees earning wages less than or equal to Rs 15,000 per month. As per the scheme, a new employee is one who has not been working in an EPFO-registered establishment on a regular basis prior to April 1, 2016. He can get the benefit of the scheme by allocation of a new Aadhaar-seeded Universal Account Number (UAN). In case the new employee does not have a new UAN, the employer needs to mandatorily facilitate it through the EPFO portal.
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