2.4 jobs lost every second: Centre should extend PF subsidy beyond June 30

To boost employment, the Centre must continue its support to subsidise the provident fund contribution for new recruits.

  • Money9
  • Publish Date - June 11, 2021 / 07:12 AM IST
2.4 jobs lost every second: Centre should extend PF subsidy beyond June 30

The second savage run of the killer virus extinguished as many as 2.53 crore jobs in just 120 days between February 1 and May 31, according to data from the Centre for Monitoring Indian Economy. On average, 2.4 jobs vanished every second. This rate of job loss is shocking, to say the least. To generate employment, the Centre had approved a package of Rs 22,810 crore back in December 2020. As a part of the Atmanirbhar Bharat Rojgar Yojana, the government is subsidising the provident fund payments for those given appointments during the pandemic relieving the companies of substantial wage bill liability.

The target is obviously to help create employment for blue-collar workers. The Centre is paying both 12% employee’s contribution and 12% employer’s contribution towards the employee’s PF for two years for those employed in the 9-month window between October 1, 2020, and June 30, 2021. In the case of establishments that employ more than 1,000 people, the government would pay only the employee’s contribution. The contribution is only for those who would be drawing less than Rs 15,000 a month.

The point to note is that when the scheme was launched in December the country was under the illusion that the worst was behind it and the economy was in a recovery mode. But the second wave, not to speak of a possible third one, has delivered more shocks to the salaried and wage-earners than could ever be imagined by the policymakers in winter.

It is, therefore, incumbent upon the government to continue its subsidy of EPF payments, and if possible, increase the upper ceiling of salary from Rs 15,000 to Rs 20,000 to encompass a bigger target. The scheme should continue till the end of this financial year when its effect should be reviewed. If it is found successful, it might be extended depending on the need for such an incentive for employment generation. The multiplier effects of job creation should not be overlooked.

 

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