Blog PMVBRY Obj & Eligibility

PMVBRY – Objectives and Eligibility

Introduction

The “Pradhan Mantri Viksit Bharat Rosgar Yogana” is the Employee Linked Incentive (ELI) Scheme announced by the Government of India in the Union Budget 2024-25, to achieve the grand vision of “Viksit Bharat@2047”. The country is facing serious unemployment and underemployment challenges and this scheme hopes to address these challenges and ease the mismatch between the skills and industry demand. Furthermore, the scheme will complement the National Manufacturing Mission announced in the Union Budget 2025-26 by providing a boost to the ‘Make in India’ initiative. The mission aims to increase the contribution of the manufacturing sector to India’s GDP from 16% to 25% by 2025.

The main objective of the ELI scheme is to stimulate the private sector to participate in job creation and workforce development. The scheme seeks to incentivize and motivate employers to hire more young people, especially recent graduates, while encouraging skill development and enhancing job retention.

The Scheme

The ELI Scheme is a package of 2 parts, namely Part A and Part B that envisages providing employment, skilling and other opportunities to a large number of youth over a period of 4 years by providing incentives to both the first time employees and the employers, with special focus on the manufacturing sector.

Part A – First-time Employees

The First time employees will gain greatly from this scheme as Part A is designed wholly for youth that are entering the formal workforce for the very first time.  All newly joined employees will be provided one-time incentive of up to ₹ 15,000/- to assist first-timers in navigating their learning curve before they become fully productive.

Part B – Incentivises Employers for Job Creation with focus on the Manufacturing Sector.

This is an employer-focused part that supports the creation of sustained additional employment in all sectors.  The scheme provides incentives to employers for a period of 2 years for encouraging additional employment.  However, for those establishments engaged in the manufacturing sector, the incentives will be provided for 4 years.

Objectives of the Scheme

The Pradhan Mantri Viksit Bharat Rozgar Yogana (PMVBRY) has been designed to stimulate employment in the formal sector by providing incentives to employees and employers. Promoting the generation of sustained employment, increasing the formalization of workforce and enhancing employability is the core objective of the scheme.

Part A of the scheme supports the first time employees in their learning curve by offsetting the costs of up skilling.  This will lead to increased productivity and employability.  By emphasizing on Financial Literacy for first time employees, the scheme hopes to equip first-timers with the essential skills to manage their future.

Part B of the scheme incentivizes employers and will give impetus to employment generation in all sectors with additional focus on the manufacturing sector. These comprehensive measures strive to foster a more dynamic, formal and inclusive labour market, particularly for the youth of India.

Terminologies and Timelines

The scheme uses a few common terminologies and the same is explained along with the timelines.

  •  Aadhaar:  This is the Number as defined under the Aadhaar Act, 2016.
  •  Baseline:  Baseline is the base requirement of the number of employees to be registered during a particular period for the establishment to receive incentives.  For existing establishments registered with EPFO for more than 12 months prior to 01-08-2025, the Baseline is the average number of employees registered during the previous 12 months. For establishments registered with EPFO for less than 12 months prior to 02-08-2025, the Baseline will be the average number of employees for the months till 31-07-2025. For New establishment, the baseline will be 20, and the establishment will start getting the incentives for registrations over and above this baseline once the threshold criterion is fulfilled.
  •  Completed Wage Month:  This refers to a full calendar month for which the Electronic Challan-cum-Return (ECR) has been duly filed with the EPFO.  If the employee’s Date of Joining is on or before the 5th of a given calendar month, then that month shall be considered as the first Completed Wage Month, whereas, for the employee who joins after 5th of the month, the subsequent calendar month will be treated as first Completed Month. This definition of Completed Wage Month will equally apply for calculating Incentives for both Employees and Employers under Part A and Part B of the Scheme.
  •  Electronic Challan-cum-Return (ECR): This is the monthly return submitted along with the prescribed amount of contributions under the EPF ACT, 1952. Where the contributions of members are not received, they will not be considered for ascertaining the benefits under Part A and Part B of the Scheme.  However, such members shall be counted towards ascertaining the Baseline.  Only the employees whose contributions have been received along with the ECR will be taken into account to provide the incentives.
  •  Employee:

     Any person joining an establishment covered under the EPF & MP Act, 1952, and in respect of whom the establishment pays contributions to EPFO through ECR or remits EPF contributions in the Trust of an exempted establishment is an “Employee”.

5.1 A New Employee is one who has joined the establishment during the scheme registration period from 01-08-2025 to 31-07-2027.

5.2  First timers:  Any employee who was not a contributing member of EPFO or Exempted Trust prior to the commencement of the scheme and the date of joining in the establishment is during the scheme registration period, and the contribution is received in EPF or Exempted Trust for the first time, will be termed as the First Timer.  Incentives to the first-timers under Part A will be considered only if this is authenticated by Face Authentication Technology on the UMANG App.

5.3 Re-Joinee:  An employee with previous contributing membership of EPF with EPFO or Exempted Trust during the scheme registration period is considered as a Re-Joinee.  A Re-Joinee with Aadhaar authenticated UAN using biometric or face authentication technology will only be admissible for the employer to receive the incentives.

5.4 Eligibility of the Employee:  To be considered for Incentives to establishments under Part B of the Scheme, a New Employee should draw a gross salary less than ₹1,00,000/- per month and whose contribution has to be received in EPFO or Exempted Trust for at least 6 months for both the employee and employer.

5.5  Old Employee:  Any employee who has joined the establishment before 01-08-2025 and has not exited is considered to be an Old Employee.  The incentives under the scheme in respect of these employees cannot be availed by the employer as he is not eligible to receive the same.

5.6  EPF Wages:  This refers to the wages on which contributions are made as per Section 6 of the EPF & MP Act, 1952.   Where the EPF contribution is 12% then the EPF wage will be total Contribution x 100/24, where the divisor 24 is 12% + 12% being the contribution percentage from the employee and employer. Similarly, where the EPF contribution is 10%, then the EPF Wage will be total Contribution x 100/20, where the divisor 20  is 10% + 10% being the contribution percentage from the employee and employer.

5.7  Establishment:  An entity duly registered under Section 1(3) or 2A of the EPF & MP Act, 1952, having an EPF Code number along with a unique PAN number,  is an “Establishment”.  “Existing Establishments” are the establishments registered with EPFO  before 01-08-2025, whereas   “New Establishments” are those establishments registered with EPFO on or after 01-08-2025.

5.8  Exempted Establishment:  Exempted Establishment is an Establishment which has been notified as “exempted” under Section 17 of the EPF & MP Act, 1952.  These establishments maintain their own Trust for providing fund benefits provided under the Act.  These benefits are in no way less favourable than similar benefits provided under the Act.

5.9  Financial Literacy Course:  EPFO’s Employee Portal/Website provides a Financial Literacy Course that is mandatory for all employees.  The course provides information on personal finance, savings & investment, and financial planning.

5.10  Registration Period:  The effective date of the scheme is 01-08-2025, and the registration period of the scheme will be from 01-08-2025 to 31-07-2027.  All employees joining an establishment during this period will be considered for arriving at the baseline,   threshold criteria, additional joining, and calculation of incentives.

 5.11  Universal Account Number (UAN):  Every member is allotted the Aadhaar authenticated unique account number by EPFO.   The Facial Authentication Technology (FAT) facility as provided on UMANG Mobile App has to be utilised for the generation of UAN from the effective date of 01-08-2025.

Applicability of the Scheme:

All establishments, whether New Establishments or Exempted Establishments, covered under the EPF & MP Act, 1952, are eligible under the scheme, subject to the condition that they file the ECRs and the contributions regularly.

The Effective date of the Scheme is 01-08-2025 and the End Date is 31-07-2027.  During this period, registration for Part A & Part B can be made.  With effect from 01-08-2025, all existing establishments which are registered with EPFO and having the Unique Employer’s Code would be deemed to be registered under the scheme.  However, these establishments should provide details of PAN, GSTIN, and PAN linked Bank Account number of the employer.

How to determine the Baseline?

  • Baseline for Existing establishments: For existing establishments registered with EPFO prior to 31-07-2024, the Baseline will be the average number of employees as per the ECRs filed for the 12-month period from 01-08-2024 to 31-07-2025.  Only establishments that regularly file ECRs along with contributions are eligible for the scheme,. For establishments registered with EPFO between 01-08-2024 to 31-07-2025, the Baseline will be the average number of employees as per the ECRs for all the months up to 31-07-2025. Establishments that have submitted ECRs along with contributions for all months from August 2024 or from the date of registration in EPFO, whichever is later, are eligible to avail the benefits of the scheme up to the wage month of July 2025.  The last date for filing ECRs along with the contributions is 31st January 2026.

  • Baseline for New Establishments:   The Baseline for new establishments which are registered with EPFO between 01-08-2025 and 31-07-2027 will be 20. However, incentives will be provided only to the additional jobs created over and above the baseline of 20.

Conclusion

The “Pradhan Mantri Viksit Bharat Rosgar Yogana” is the Employee Linked Incentive (ELI) Scheme announced by the Government of India in the Union Budget 2024-25.  This is a strategic approach by the Central Government to address the unemployment and underemployment challenges in the country and to drive economic growth. The incentives target both the employers and employees, and are deeply focussed on creating a more inclusive and dynamic job market. The PMVBRY scheme will not only support workforce expansion and formalization, but will also significantly enhance the financial relief to employers, especially SMEs, thus providing the right impetus for them to grow and hire.

Getify, is a vastly experienced outsourcer of Payroll processing and HR Management, based out of Coimbatore.  We assure all stakeholders of our continued support in fully utilising these initiatives to foster growth and job creation, and to ensure a thriving and sustainable business in the long term.  All stakeholders can take pride in the fact that their efforts will complement the National Manufacturing Mission announced in the Union Budget 2025-26 by giving a boost to the Make in India initiative.

PMVBRY

PMVBRY – Guidelines for calculating incentives under the Scheme.

Introduction

The grand vision of “Viksit Bharat @ 2047” is hoped to be achieved by the Employee Linked Incentive (ELI) Scheme under the name.  The “Pradhan Mantri Viksit Bharat Rosgar Yogana” announced by the Government of India in the Union Budget 2024-25. As you are aware, this scheme will complement the National Manufacturing Mission announced in the Union Budget 2025-26 by providing a boost to the ‘Make in India’ initiative.  The main objective of this scheme is to increase the contribution of the manufacturing sector to India’s GDP from 16% to 25% by 2025.

In this article we will dwell on the eligibility, benefits and the guidelines for calculating the incentives under the scheme.

 1.  Part A of the Scheme  – Eligibility of Employee under Part A:

All First timers are eligible to receive the benefits under the scheme subject to the establishment being covered under the EPF & MP Act, 1952. All First timers drawing gross wages up to ₹ 1,00,000/- at the time of joining the establishment registered with the EPFO will be eligible to receive the incentives under Part A of the scheme, subject to filing of ECRs with contribution for 6 continuous months.

First Timers employed in establishments which are part of the seasonal industry as defined under the EPF & MP Act, 1952 can be considered as eligible if the ECRs are filed over 6 months during a period of 12 months irrespective of continuity, and if the First timer is employed in the same establishment for the entire period.

Exempted establishments should provide details of all employees, including the First timers for whom the contributions are being deposited in their PF Trust, along with the filing of ECRs without contributions to EPFO.

The First timer in an Establishment is eligible to receive the 2nd instalment of the incentive under Part A of the scheme when all the 12-month ECRs have been filed within a period of 18 months from date of joining the establishment.

2. Calculation of Incentives:

Under Part A, the First timer can receive an incentive that is equivalent to one completed month EPF wage, subject to a maximum of ₹ 15,000/-.

The incentives will be paid in two instalments.  The first instalment will be half of the average EPF wage for 6 continuous months subject to a maximum of ₹ 7,500/-.  This instalment will be paid after filing of six completed months’ ECR’s along with the contributions.  The second instalment will be invested in an appropriate saving instrument/deposit account for a period to be specified by M/o L & E in due course.   The First timer will be eligible to receive this part of the incentive only after completion of the Financial Literacy program and filing of 12 completed months’ ECR’s along with contribution by the establishment.

Part B of the Scheme:

The benefits under Part B will be paid to the employers in respect of the First timers and Re-joinees subject to fulfilling the threshold criterion.

Incentive Amount and Periodicity

The incentives to employers under Part B will be paid for 4 years for manufacturing industry and 2 years for others at the following rates in respect of employment generated over and above the baseline fulfilling the threshold level. Where the baseline is less than 50, at least 2 additional employments are required for eligibility, and where the baseline is 50 & above, at least 5 additional employments are required for eligibility.

The incentives to employers will be as under:
EPF Wage slabs of Additional employees Benefit to the Employers in ₹.  (Per additional employment per month as per prescribed criteria)
<= ₹ 10,000* Up to ₹ 1,000
₹20, 000 to ₹ 1,00,000** ₹3,000
  • * Where the employees get EPF wages less than ₹ 10,000, the incentive at the rate of 10% of EPF wage will be provided.
  • *Incentives will be paid to new employees with EPF wages up to ₹ 1,00,000/- at the time of joining the establishment.

These incentives will be paid to all eligible establishments in lump-sum payments every six months, after filing for six completed months ‘ECR’s based on eligibility of the employer and employees.  Further, these benefits will be provided in respect of those first-timers and Re-joinees who complete 6 months of employment with the same employer.

In case the employer is not eligible as per the threshold criteria, the benefits will not be provided, and there will not be any extension to the incentive period.

Eligibility of Establishment under Part B

The eligibility of the establishment will be determined based on the threshold criteria as detailed below:

During the first 6 months of joining the scheme, the average number of employees in the establishment as per the ECRs filed for that period should be more than or equal to the Baseline plus the threshold limit.

Between the 7th and 12th month, the average number of employees in the establishment as per the ECRs filed from the 1st month up to the last month should be more than or equal to the Baseline plus the threshold limit.

From the 13th month onwards the average number of employees in the establishment should be more than or equal to the Baseline plus the threshold limit as per the ECRs filed from 1st month up to that month.

If any establishment registered with the EPF & MP Act, 1952 has pending inquiries under Section 7A/7B/7C of the Act and Para 26-B of EPF scheme; the incentives under Part B will be with held.  Also establishments against whom a FIR has been filed by EPFO for fraudulent practices or where inquiries relating to irregularities under the ABRY Scheme or any other scheme are pending or has been decided against the establishment, then the incentive will be with held.

Discontinuation of the Incentives

The Payment of Incentives under the scheme will be discontinued under certain conditions:

  1.  In case the First timer leaves the employment on his own volition or otherwise.
  2.  In case of any eventuality, like death, etc, of the beneficiary.
  3.  If the establishment winds up.
  4.  In the event of any misrepresentation or fraud.
Mode of Payment

  1.  The incentives will be disbursed within 45 days, once the ECRs are filed and contributions paid as per the periodicity as defined under the respective Part of the scheme.

  2. The incentives to the establishments shall be disbursed as Direct Benefit Transfer to the PAN-linked Bank Accounts of the Establishment.  In case a group of establishment under the same PAN are eligible for the incentives, then payment will be made to a single PAN-linked Bank account nominated by the group.

  3. The incentives to the employees shall be paid through (Aadhaar Bridge Payment System) Direct Benefit Transfer to their Aadhaar-seeded Bank accounts.

In case the employees’ bank account is pending for Aadhaar seeding, then the payment shall remain suspended. However, the incentive would continue to accrue during this period and, once the bank account is Aadhaar-seeded, the payment, including arrears, would be released as per the scheme guidelines.

Other features of the Scheme

  1.  Rounding Off:  All calculation to arrive at the Baseline, threshold, and average strength of employment may be rounded off to the nearest integer.

  2.  Penalty for fraudulent activities:  Legal action may be initiated against establishments found indulging in fraudulent activities or availing incentives based on fictitious data or documents or otherwise.  The Ministry of Labour and Employment will issue a comprehensive Penalty clause to this effect.

  3.  Communication strategy & Advocacy: A nation-wide multimedia outreach strategy using social media, traditional media, webinars, workshops etc., will be adopted to give wide coverage to the scheme.  For better advocacy of the scheme, the outreach will be done in multiple languages.
Monitoring and Evaluation
Monitoring

For purpose of monitoring the scheme, an inter-ministerial Steering Committee will be constituted by the Ministry of Labour and Employment.  The Steering Committee would provide recommendation on wide ranging functions of the scheme.  The Steering committee is scheduled to meet at least once every quarter or as decided by the Chairperson.

An Executive Committee under the Chairpersonship of CPFC will also be constituted by the Ministry of Labour and Employment.  To ensure proper implementation of the scheme, the Executive Committee will meet every month.

Evaluation

Based on the recommendations of the Steering Committee, a third party mid-term evaluation of the Scheme shall be undertaken for necessary course correction after one year of the start of the scheme.

A third-party end-term evaluation of the scheme shall be conducted three months prior to the closure of the scheme to assess the outcome of the Scheme.  The incidental costs of this evaluation will be met from the Administrative charges allocated for the Scheme.

 Administration and Grievance Redressal of the Scheme

The scheme shall be administered by the EPFO under the overall supervision of the Ministry of Labour and Employment.  EPFO shall provide an online facility to stakeholders to lodge grievances related to the scheme.  A Call Centre for PMVBRY will also be set up to assist stakeholders.

Financial Outlay of the Scheme

The Government has earmarked ₹ 99,446 Crores for the scheme, and this includes Administrative charges of ₹ 248 crores. EPFO aims to create 3.5 crore jobs during a 2 year period through this scheme.

Taxation

The incentives received under the scheme are taxed as they are subject to the provisions of the Income Tax Act, 1961.

Audit

The CAG will conduct a statutory audit of the Scheme, whereas, the Internal Audit Wing (IAW), M/o. L & E will conduct a non-statutory Audit.  Concurrently, an internal Audit will be conducted by EPFO.

Conclusion

The “Pradhan Mantri Viksit Bharat Rosgar Yogana” is the Employee Linked Incentive (ELI) Scheme announced by the Government of India in the Union Budget 2024-25.  The PMVBRY scheme not only incentivises both the employers and employees, but is a measure that focuses on creating a more inclusive and dynamic job market. The scheme hopes to significantly enhance the financial relief to employers especially SMEs, thus providing the right impetus for them to grow and hire, and will also support workforce expansion and formalization.

Getify, is fully equipped to provide all stakeholders of our continued support in fully utilising these initiatives to foster growth and job creation, and to ensure a thriving and sustainable business in the long term.  As one of the leading Payroll processing and HR management companies in the region we can assure all our clients of our professional support in benefitting from this scheme.