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Employment schemes

Schemes that pay employers and workers to create formal jobs, and what their first years show.

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StandardPrelims and Mains1 Aug 2026

The Pradhan Mantri Viksit Bharat Rozgar Yojana is the Centre's employment linked incentive scheme, run through the Employees' Provident Fund Organisation. It began on 1 August 2025 and runs for two years, to 31 July 2027, with an outlay of ₹99,446 crore and a target of over 3.5 crore jobs, 1.92 crore of them first jobs.
Part A pays a first time employee earning up to ₹1 lakh a month a one time incentive of one month's provident fund wage, capped at ₹15,000, in two instalments: after six months of service and after twelve, the second on completing a financial literacy course. A part of it goes into a savings instrument the employee can withdraw later.
Part B pays the employer up to ₹3,000 a month for two years for each additional employee earning up to ₹1 lakh who stays at least six months; in manufacturing the incentive runs into a third and fourth year.
Everything runs on the provident fund rails: a Universal Account Number, Aadhaar face authentication on the UMANG app, the monthly electronic challan, and direct benefit transfer to the employee's account.

	Part A: the first time employee	Part B: the employer
Who	A worker earning up to ₹1 lakh a month, opening a first provident fund account	An establishment adding employees earning up to ₹1 lakh who stay at least six months
What is paid	One month's wage, capped at ₹15,000, in two instalments: after six months, and after twelve on finishing a financial literacy course; a part goes into a savings instrument	Up to ₹3,000 a month for each additional employee
For how long	Once	Two years; a third and fourth year in manufacturing
Through what	Direct benefit transfer to the employee's account	Paid against the monthly electronic challan

On 1 August 2026 the scheme completed a year. The Ministry of Labour and Employment reported over 72 lakh first time employees joining the formal workforce since August 2025, nearly 30 per cent of them women, and more than 15 lakh beneficiaries paid.
The gap between the two numbers is the six month wait built into Part A, so payments lag enrolment by design.

The scheme pays for formalisation rather than for employment as such: the test of a job is a provident fund account, so it counts only jobs in establishments covered by the Act, which is where the subsidy is meant to pull the small firm.
Its evidence base is the provident fund payroll data, which is also its weakness: a worker moved from an uncovered to a covered establishment is a "new" job in the data without being a new job in the economy, which is the question every evaluation of the scheme will have to answer.
The two year window and the manufacturing extension are the design features a question can ask; the 72 lakh figure is the one that will be revised.

Pradhan Mantri Viksit Bharat Rozgar Yojana (1 August 2025 to 31 July 2027)

Ministry of Labour and Employment through the EPFO
₹99,446 crore
Part A for first time employees (one month's wage up to ₹15,000, in two instalments), Part B for employers (up to ₹3,000 a month for two years, four in manufacturing)
Wage ceiling ₹1 lakh a month.

Employees' Provident Fund

Statutory for establishments with 20 or more workers under the Act of 1952; the wage ceiling for compulsory coverage was raised to ₹25,000 in September 2026.

Prelims: start date 1 August 2025, two years; EPFO administers; Part A ₹15,000 cap in two instalments; Part B ₹3,000 a month for two years, four for manufacturing; wage ceiling ₹1 lakh.
Mains: whether paying for provident fund enrolment creates jobs or records them, and how an evaluation could tell.

Show the questions

Prelims 2021: With reference to casual workers employed in India, consider the following statements: 1. All casual workers are entitled for Employees Provident Fund coverage. 2. All casual workers are entitled for regular working hours and overtime payment. 3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account. Which of the above statements are correct?
Mains 2023 GS3: Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements.

Sources

Settled facts (dates of Acts, constitutional provisions, standing definitions) are from standard references.