The Cabinet Committee on Economic Affairs today approved the proposal under the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) wherein the government will bear expenses of employer's full contribution for pension for the first three years for new employees.
The government will now contribute the employer's full admissible contribution for the first three years from the date of registration of the new employees for all the sectors including existing beneficiaries for their remaining period of three years, an official statement said.
This will result into benefits to employees of informal sector as they would get social safety net and there would be more job creations also.
Till now, the scheme has produced quite encouraging results and has added about 31 lakh beneficiaries to the formal employment involving an expenditure of more than Rs 500 crore.
The scheme is in operation since August, 2016.
Under this, the government pays the 8.33 per cent contribution of employers to the Employees' Pension Scheme (EPS) in respect of new employees (who have joined on or after 1st April 2016).
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The employees need to have a Universal Account Number (UAN) and a salary of up to Rs 15,000 per month.
The statement said the scheme has a dual benefit --on the one hand 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," said the statement.