New Delhi: The government on Thursday announced a reduction in women employees' contribution to EPF to 8 per cent for first three years and extended the fixed-term employment facility to all sectors to create more jobs.
Besides, it also proposed to extend the facility of payment of 12 per cent employers' contribution by government towards social security schemes run by Employees Provident Fund Organisation (EPFO) for new employees for first three years of their employment to all sectors.
"To incentivise employment of more women in the formal sector and to enable higher take home wages, I propose to make amendments in the Employees Provident Fund and Miscellaneous Provision Act 1952, to reduce women employees' contribution to 8 per cent for first three years of their employment against existing rate of 12 per cent or 10 per cent with no change in employers' contribution," Finance Minister Arun Jaitley said in his Budget Speech on Thursday.
"The government will contribute 12 per cent of the wages of the new employees in the EPF for all the sectors for next three years. Also the facility for fixed-term employment will be extended to all sectors," he said.
At present, the fixed term employment facility is available to sectors employing large number of workers like textiles, leather and footware under the the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).
The government pays 8.33 per cent of basic wages as employers' contribution toward Employees' Pension Scheme (EPS) for other sectors and the firms are paying 3.67 per cent as their share of contribution towards Employees Provident Fund under the PMRPY.
The government claimed that such measures in the past have been paying dividends and would result in creation of 70 lakhjobs this year as per an independent study.
"Proposed changes to PF scheme by way of Government PF contributions for new employees and reduced PF contributions by employers for women for first three years will help in promoting employment growth, and more so for employment of women," said Alok Agrawal, Senior Director, Deloitte Haskins & Sells.