PM-VBRY: 5 Key Benefits for First-Time Indian Employees
India's robust economy is continuously striving to create more opportunities, especially for its youth entering the workforce for the first time. The government has rolled out several initiatives designed to formalize employment, provide social security, and ease the entry of new employees into the organized sector. Among these, schemes like the Atmanirbhar Bharat Rojgar Yojana (ABRY) stand out, offering significant advantages to both employers and new hires. While you might be familiar with various government acronyms, understanding the practical benefits is key. This post focuses on the crucial advantages that first-time Indian employees can gain from such supportive government programs.
What is the Atmanirbhar Bharat Rojgar Yojana (ABRY)?
Launched as part of the Atmanirbhar Bharat Package 3.0, ABRY aims to incentivize employers to create new employment opportunities. Under this scheme, the Government of India provides a subsidy for the provident fund (PF) contributions of new employees joining establishments registered with the Employees' Provident Fund Organisation (EPFO). This directly translates into a significant financial relief for both employers and the new workforce.
Eligibility for ABRY (General Criteria):
To benefit from ABRY, an establishment must be registered with EPFO. The scheme covers new employees who were not members of EPFO or had a Universal Account Number (UAN) with nil contributions before 1st March 2020. It also covers those who left employment between March 1, 2020, and September 30, 2020, and rejoined. The scheme is for employees earning a monthly wage of less than Rs. 15,000.
5 Key Benefits for First-Time Indian Employees
1. Reduced Financial Burden through EPF Contribution Subsidy
For establishments employing up to 1000 employees, the government pays both the employee’s 12% contribution and the employer’s 12% contribution, totaling 24% of the wages. For establishments with over 1000 employees, the government pays the employee’s 12% contribution. This direct subsidy means that a portion of the employee's salary that would typically go towards PF contributions either remains in their take-home pay or is fully covered by the government, leading to immediate financial relief.
2. Entry into Formal Sector Employment and Social Security Net
One of the most significant advantages for first-time employees is gaining entry into the formal employment sector. This comes with the benefits of being part of the Employees' Provident Fund (EPF) scheme. EPF ensures a structured savings mechanism for retirement, along with benefits like the Employees' Deposit Linked Insurance (EDLI) scheme, which provides insurance cover, and the Employees' Pension Scheme (EPS), offering a pension upon retirement. These are crucial elements of a robust social security net.
3. Increased Employability and Job Opportunities
By subsidizing PF contributions, schemes like ABRY significantly reduce the cost of hiring new employees for businesses. This financial incentive encourages employers, especially Micro, Small, and Medium Enterprises (MSMEs), to expand their workforce and create more jobs. For fresh graduates and first-time job seekers, this translates into a higher likelihood of securing formal employment.
4. Foundation for Long-Term Financial Security
While the immediate benefit is financial relief, the long-term impact is profound. By being enrolled in EPF from their very first job, employees start building a substantial corpus for their retirement. This early start, coupled with the power of compounding, can lead to a significant financial cushion in later years, fostering a sense of security and encouraging disciplined savings habits.
5. Boost to Economic Inclusion and Formalization
These schemes contribute to the broader goal of formalizing India's workforce. Bringing more individuals into the organized sector means better working conditions, adherence to labor laws, and access to statutory benefits. For first-time employees, this ensures a more secure and dignified start to their professional journey, contributing to overall economic inclusion and growth.
How to Avail the Benefits (Employer-Driven Process):
It's important for employees to understand that the benefits under ABRY are processed through their employers. Employers registered with EPFO, who meet the scheme's criteria, apply for the subsidy for eligible new employees. Employees do not need to make a separate application; their enrollment in the scheme is handled by their employer.
Conclusion:
Government initiatives like the Atmanirbhar Bharat Rojgar Yojana play a pivotal role in supporting India's youth as they embark on their professional careers. By easing the financial burden on employers and new hires, these schemes not only create more jobs but also integrate first-time employees into the formal economy, providing them with essential social security benefits and a foundation for long-term financial stability. Understanding these benefits empowers new employees to appreciate the value of formal employment and the government's commitment to fostering a thriving workforce.
