SYLLABUS
GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Context: The Prime Minister recently disbursed incentives worth nearly ₹2,400 crore under the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), a flagship employment-linked incentive scheme aimed at promoting formal job creation and social security coverage.
More on the News
• PM-VBRY is a nationwide employment initiative implemented by the Ministry of Labour & Employment through the Employees’ Provident Fund Organisation (EPFO).
• Approved by the Union Cabinet in July 2025, the scheme seeks to incentivise the creation of over 3.5 crore jobs over a two-year period (between 1 August 2025 and 31 July 2027), including about 1.92 crore first-time employees.
• The scheme has a total outlay of ₹99,446 crore and provides incentives to both first-time employees and employers generating additional employment.
• PM-VBRY is designed to act as a bridge between youth entering the workforce and industries seeking to expand employment while promoting workforce formalisation and social security.
Key Features of PM-VBRY
• Part A: Support to First-Time Employees
- First-time employees registered with EPFO and earning up to ₹1 lakh per month are eligible for an incentive equivalent to one month’s EPF wage, subject to a ceiling of ₹15,000.
- The incentive is disbursed in two instalments—the first after six months of continuous service and the second after twelve months, subject to completion of a financial literacy programme.
- This component is expected to benefit around 1.92 crore first-time employees.
• Part B: Incentives for Employers
- Employers generating additional employment are eligible for incentives of up to ₹3,000 per month per additional employee.
- The incentive is available for two years across sectors, while manufacturing units receive extended support in the third and fourth years to promote long-term job creation.
- The scheme is expected to incentivise the creation of nearly 2.6 crore additional employment opportunities.
• Progress Achieved
- Under the scheme, nearly 70 lakh new jobs have been created so far, and an equal number of first-time employees have been brought under the ambit of social security.
- Around 20 lakh youth have completed six months in their first jobs under the scheme.
- Nearly 10 lakh beneficiaries have received incentives, with more than ₹2,000 crore transferred directly into their bank accounts.
- The government also notes that nearly 70 lakh new jobs have been created and around 70 lakh first-time employees brought under social security coverage.
Significance of the Scheme
• Employment Generation and Demographic Dividend: India’s large youth population can become a productive asset only through sustained job creation. PM-VBRY seeks to accelerate employment generation by reducing the cost of hiring for employers and facilitating labour-market entry for first-time workers.
• Formalisation of the Workforce: By linking incentives with EPFO registration, the scheme encourages a shift from informal to formal employment, expanding access to provident fund benefits and social protection.
• Strengthening Social Security: PM-VBRY integrates employment generation with social security expansion, ensuring that newly employed workers receive greater economic security and long-term financial protection.
• Boost to Manufacturing and Economic Growth: Extended incentives for manufacturing complement initiatives such as Make in India and support labour-intensive industrial growth, productivity enhancement, and export competitiveness.