Pradhan Mantri Viksit Bharat Rojgar Yojana (PM-VBRY)- Formal Employment and Social Security

Source: PIB
GS III: Indian Economy, Employment, Inclusive Growth

Why in the News?

PM-VBRY has completed one year of implementation on 1 August 2026, marking a key milestone in the Government’s employment generation strategy.

News in Brief

• The government highlighted its progress in promoting formal employment and social security through an EPFO-linked framework.
• The scheme supports first-time employees and incentivises employers to generate new jobs.
• It aligns with the vision of Viksit Bharat 2047 by strengthening workforce formalisation.

Key Features of PM- VBRY

• The Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY) is an employment-linked incentive scheme by the Government of India.
• It aims to generate employment for over 3.5 crore people, including 1.92 crore first-time employees.
• PM-VBRY was launched in August 2025 and is being implemented from 1 August 2025 to 31 July 2027.
•  Eligible registrations can be processed via the PMVBRY Portal.

Objectives

• Promote formal jobs in the organized sector.
• Encourage first-time entry into the workforce.
• Expands social security through direct benefit transfers managed through the Employees’ Provident Fund Organisation.
• Support job creation in labor-intensive sectors.

Incentives for First-Time Employees (Part A)

• Eligibility– The incentive is available to first-time employees registered with the Employees’ Provident Fund Organisation (EPFO) who earn a monthly salary of up to ₹1 lakh, encouraging new entrants to join the formal workforce.
• Financial Incentive– Eligible employees receive a one-time financial incentive equivalent to one month’s EPF wage, subject to a maximum limit of ₹15,000, to support their transition into formal employment.
• Disbursement Mechanism-The incentive is released in two instalments- the first after six months of continuous service and the second after twelve months of continuous service, promoting sustained employment rather than short-term hiring.
• Financial Inclusion- Before receiving the second instalment, employees must complete a financial literacy programme. Additionally, a portion of the incentive is invested in a designated savings instrument, which can be withdrawn later, encouraging long-term savings and financial security.

Incentives for Employers (Part B)

• Eligibility– Employers hiring additional employees with a monthly salary of up to ₹1 lakh are eligible for financial assistance under the scheme, provided the employees are retained for at least six months.
• Financial Incentive– Employers receive up to ₹3,000 per month for each eligible additional employee for a period of two years, helping reduce recruitment and wage-related costs.
• Special Support for Manufacturing– Recognising the sector’s high employment potential, manufacturing establishments are eligible to receive incentives for an additional two years, extending the support period to four years.
• Employment Generation– By lowering the cost of hiring and rewarding workforce retention, the scheme encourages employers to create new formal jobs, particularly in labour-intensive industries, while promoting long-term and stable employment.

Key First-Year Milestones

• Workforce Growth- Over 72 lakh first-time workers registered through the Employees’ Provident Fund Organisation (EPFO).
• Women Participation- Nearly 30% of the total beneficiaries aided in the first year are women.
• Direct Benefit Transfers– More than 15 lakh beneficiaries have already received their initial financial incentives directly via Aadhaar-linked accounts.
• Strengthened organised employment and social security coverage.

Significance and Challenges

• Brings millions of informal workers into the organised social security net, promoting formalisation of India’s labour market.
• Focuses heavily on labour-intensive manufacturing to complement the National Manufacturing Mission.
• Direct benefit transfers link young workers to organized banking and provident funds.
• Contributes to inclusive growth and demographic dividend.

Challenges

• A large portion of India’s labour force still operates outside the EPFO framework.
• Smaller businesses and rural workers often lack information on how to claim incentives.
• Ensuring companies maintain employment levels after government subsidies end.
• Achieving seamless, corruption-free rollout across diverse geographic and industrial sectors.

Conclusion

PM-VBRY represents a significant step towards expanding formal employment, strengthening social security, and harnessing India’s demographic dividend.

By combining employment-linked incentives with a technology-driven implementation framework, the scheme seeks to create sustainable jobs while advancing the vision of Viksit Bharat 2047.

UPSC Prelims and Mains Practice Question

Consider the following statements regarding the Pradhan Mantri Viksit Bharat Rojgar Yojana (PM-VBRY):

1. It encourages first-time formal employment through EPFO registration.
2. Employers in all sectors receive incentives for four years.
3. Benefits are transferred through Direct Benefit Transfer (DBT).

Which of the statements given above is/are correct?

(a) 1 and 3 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3

Answer: (a)

Mains Practice Question

Q. “Employment generation and labour market formalisation are essential for achieving inclusive economic growth in India.” Discuss. (250 Words)

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