PM Modi’s employment incentive scheme becomes millstone around neck of MSMEs
New Delhi, July 10 (KNN) To bring down high cost of social security and encourage employers to employ new workers, Prime Minister Rojgar Protsahan Yojna (PMRPY) was launched in 2016 with a big fanfare.
Under the PMRPY Scheme Government paid the full employers' EPS contribution of 12% , for the new employees, for the first three years of their employment.
The scheme became extremely popular and over 1 crore new employees have joined since.
But now employers that availed the scheme are being hounded by Provident Fund officials on alleged lapses. The bone of contention is definition of new employee.
After receiving complaints from several members Guragaon based Udyog Vihar Industries Association (UVIA) has written to senior EPFO officials.
According to the association, the scheme allowed an employer to avail of PMRPY benefits for new ‘eligible employees’. The new employee is defined as one that had not worked in any EPFO registered establishment or had a Universal Account Number (UAN), in the past, i.e. prior to 01 April, 2016. The new UAN could only be generated through EPFO/ PMRPY portals, both of which are linked and that too for new employee only otherwise the existing database of these portals would reject registration.
Therefore, while hiring new workers and availing of the scheme most employers construed UAN registration as a proof that worker is ‘new’ and is not registered with EPFO earlier.
However, after the launch of the scheme and an internal scrutiny, the EPFO started linking UAN with AAdhar and cases of duplication were reported.
In such cases, employers have been served notices to refund the employer’s contribution deposited by the Government along with interest and damages.
The UVIA in its petition has protested saying it was not the fault of employers as UAN was generated by EPFO’s own portals completely automatically.
“Even if it was found that employee was not ‘new’ and was already registered, at best the department should have asked for was refund of Government’s contribution. Why should employers pay interest and damages for no fault of theirs”, states the communication of UVIA.
But in the process another flagship scheme of Government, that too a favourite one of the Prime Minister, has been marred in the controversy which at best could have been avoided.