Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY): A Step Towards Employment-Linked Growth
Introduction
The Government of India has consistently prioritized employment creation, formalization of the workforce, and skill enhancement as pillars for achieving the vision of Viksit Bharat @ 2047. In line with this, the Union Budget 2024–25 introduced an ambitious Employment Linked Incentive Scheme named Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY).
The scheme, implemented by the Ministry of Labour & Employment through the Employees’ Provident Fund Organisation (EPFO), combines direct support to employees with incentives to employers. It aims to boost job creation, encourage formal employment, and strengthen India’s labour-intensive manufacturing ecosystem.
This article outlines the key features, operational mechanisms, and implications of PMVBRY for employers, employees, and professionals such as Chartered Accountants who play a critical advisory role in compliance and implementation.
Objectives of the Scheme
The PMVBRY is designed with three central objectives:
1. Stimulate employment creation by incentivizing establishments for generating additional jobs.
2. Enhance employability and financial literacy of first-time employees.
3. Encourage formalization of the workforce, thereby expanding social security coverage through EPFO.
By linking financial incentives with employment creation, the scheme also aligns with the National Manufacturing Mission, encouraging both new industries and scaling up of existing enterprises in labour-intensive sectors.
Structure of the Scheme
The PMVBRY has two distinct parts:
Part A – Support to First-Time Employees:
– Provides a one-time incentive up to ₹15,000.
– Disbursed in two instalments: first instalment (up to ₹7,500) after 6 months of continuous employment, and second instalment after 12 months, subject to Financial Literacy Course completion.
– Incentive equals one month’s EPF wage (subject to cap).
Part B – Support to Employers:
– Incentivizes establishments for generating sustained additional employment.
– Benefit ranges from ₹1,000 to ₹3,000 per employee per month depending on EPF wage slabs.
– Applicable for 2 years for all sectors, and 4 years for manufacturing sector.
– Threshold requirement: 2 additional employees (baseline < 50), 5 additional employees (baseline ≥ 50).
-EPF Wage refers to the wage on which contributions are made in accordance with Section 6 of the EPF and MP Act, 1952. This wage will be considered for the purpose of calculating incentives under the Scheme. The EPF wage shall be derived through a reverse calculation method based on the actual contribution amount submitted via the ECR, using the following formula, depending on the applicable contribution rate:
i. EPF Wage = (Total Contribution Amount × 100) / 24
or
ii. EPF Wage = (Total Contribution Amount × 100) / 20Applicability and Baseline Determination
– Eligible Entities: All establishments under the EPF & MP Act, 1952 (including exempted trusts).
– Baseline for Existing Establishments: Average employment during Aug 2024 – July 2025.
– Baseline for New Establishments: Fixed at 20 employees.
– Registration Period: From 1st August 2025 to 31st July 2027.
Illustrative Examples
Example 1:
Consider a Manufacturing concern in Sonipat, Haryana with a baseline workforce of 500 employees (as per average EPF filings during Aug 2024 – July 2025). To meet enhanced production demand, the company hires an additional 100 employees after 1st August 2025. This exceeds the threshold of 5 additional employees for establishments with baseline ≥ 50.
Accordingly, the employer becomes eligible for incentives under Part B of PMVBRY. The benefit calculation would be as follows (assuming employees fall in different wage brackets):
- 40 employees with EPF wages of ₹9,000 each → Incentive: ₹1,000 × 40 = ₹40,000 per month
- 30 employees with EPF wages of ₹15,000 each → Incentive: ₹2,000 × 30 = ₹60,000 per month
- 30 employees with EPF wages of ₹25,000 each → Incentive: ₹3,000 × 30 = ₹90,000 per month
Total incentive = ₹1,90,000 per month, payable for 4 years or a total of Rs.91.20 Lakhs over a period of 4 years.
This structured support significantly reduces employment costs for the establishment while ensuring sustained job creation in the formal sector.
Example 2:
A new GCC (Global Capability Centre) begins operations on 1st September 2025 with 200 employees in Gurgaon, Haryana. Being a new establishment registered after 1st August 2025, its baseline is fixed at 20 employees.
Net additional employment = 200 – 20 = 180 employees (well above the 5-employee threshold).
Incentive Calculation (as per Part B – PMVBRY)
- 150 employees with EPF wage = ₹20,000 Incentive = ₹2,000 × 150 = ₹3,00,000 per month
- 30 employees with EPF wage = ₹50,000 Incentive = ₹3,000 × 30 = ₹90,000 per month
- Total incentive = ₹3,90,000 per month or 93.60 Lakhs over 2 years
- Duration = 2 years (as GCCs fall under services sector, not manufacturing)
This scheme along with benefits Under Sec 80JJAA of Income Tax Act brings significant cost reductions for employers and encourages employers for expanding and generating new employment opportunities.
Safeguards Against Misuse
To prevent fraudulent claims and misuse:
– Face Authentication Technology (FAT) for UAN generation on UMANG App.
– API-based data verification with Income Tax, GSTN, MCA, ESIC, etc.
– Disqualification in cases of pending EPF inquiries, fraud, or non-compliance.
– Mid-term and end-term third-party evaluations.
Financial Outlay and Implementation Framework
– Total Financial Outlay: ₹99,446 crore (including administrative charges).
– Administration: EPFO under Ministry of Labour & Employment.
– Monitoring Mechanism: Steering Committee (policy oversight) and Executive Committee (implementation).
– Grievance Redressal: Online portal, call centres, and escalation matrix with 15-day resolution target.
Opportunities and Challenges
Opportunities:
1. Boost to employment generation in MSMEs and manufacturing.
2. Greater formalization of workforce and EPFO coverage.
3. Productivity enhancement and skill-building for first-time employees.
4. Extended incentive duration for manufacturing sector.
5. Improved compliance through data integration.
Challenges:
1. Complexity in determining baseline and threshold.
2. Risk of misuse and inflated employment data.
3. Compliance burden for smaller establishments.
4. Dependence on EPFO IT systems for timely disbursement.
Conclusion
The Pradhan Mantri Viksit Bharat Rozgar Yojana is a forward-looking initiative that balances employee welfare with employer incentives. By combining skill support, financial literacy, and direct benefits with targeted employer incentives, the scheme is poised to stimulate job creation, formalization, and productivity in the Indian labour market.
However, its success will depend on robust implementation, strict monitoring, and active participation from professionals guiding establishments. For Chartered Accountants, the scheme represents both an opportunity to support clients in leveraging benefits and a responsibility to ensure transparent compliance.
As India moves towards the vision of Viksit Bharat @ 2047, PMVBRY can serve as a cornerstone in shaping a more inclusive and dynamic employment landscape.
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