Paid to hire, paid to work: Inside India’s Rs 99,446 cr plan to reshape formal workforce

The Pradhan Mantri Viksit Bharat Rozgar Yojana is a central government scheme for encouraging formal employment. It supports first-time workers entering EPFO-covered jobs and rewards companies that expand and retain their workforce. The scheme matters because regular salaried work accounts for only 23.6 per cent of India’s workforce.

Part A gives an eligible first-time employee a one-time payment equal to one month’s EPF wage, capped at Rs 15,000. Part B supports employers that create additional qualifying jobs. They can receive up to Rs 3,000 each month for every eligible additional employee.

The scheme covers eligible jobs created from August 1, 2025, to July 31, 2027. Manufacturing employers receive support for four years, while employers in other sectors receive it for two. PMVBRY targets formal payroll employment, not every kind of work.

PMVBRY is a large two-year employment incentive programme. The Union Cabinet approved it on July 1, 2025, with a total outlay of Rs 99,446 crore. Its scale reflects the government’s effort to expand formal payroll employment rather than simply reduce unemployment.

The government aims to incentivise more than 3.5 crore jobs created during the scheme period. This total includes 1.92 crore first-time employees. The support applies to eligible jobs created between August 1, 2025, and July 31, 2027.

These figures are government targets, not independent estimates of jobs that will actually be created. The scheme focuses on EPFO-covered employment. It therefore does not directly measure or guarantee work for self-employed people, casual labourers, or workers in informal jobs.

Eligibility depends on the type of participant and job. A worker must be a first-time employee entering employment covered by the Employees’ Provident Fund Organisation. An employer must create additional qualifying jobs during the scheme’s coverage period. The article does not provide further eligibility conditions.

Part A supports the individual worker. It provides a one-time incentive equal to one month’s EPF wage, with a maximum payment of Rs 15,000. Part B supports the employer. It offers up to Rs 3,000 per month for each qualifying additional employee.

The distinction links both payments to formal payroll expansion. Jobs must be created between August 1, 2025, and July 31, 2027. PMVBRY is not an employment guarantee, so qualifying payments depend on the scheme’s specified employment categories and conditions.

PMVBRY makes workforce expansion financially attractive for employers. Under Part B, a qualifying employer receives an incentive when it creates additional jobs. The scheme also rewards the retention of new hires, linking support to jobs that continue rather than disappear quickly.

For each qualifying additional employee, the employer can receive up to Rs 3,000 per month. The job must fall within the scheme’s eligible period, which runs from August 1, 2025, to July 31, 2027. The payment is separate from the one-time worker incentive under Part A.

The duration depends on the sector. Employers outside manufacturing receive support for two years, while manufacturing establishments receive it for four years. This mechanism targets expansion in EPFO-recorded formal payroll employment, rather than self-employment or casual work.

Manufacturing receives a longer incentive period because PMVBRY is linked to the government’s wider manufacturing goals. The official guidelines say the scheme is intended to complement the National Manufacturing Mission by promoting new industries and expanding existing ones, especially labour-intensive manufacturing.

In practice, an eligible manufacturing establishment can receive Part B support for four years for qualifying additional employees. An employer in another sector receives the incentive for two years. Both types of employers must create eligible additional jobs during the scheme period.

The policy responds to manufacturing’s employment potential. Manufacturing employed 12.1 per cent of workers in PLFS 2025, while covered manufacturing establishments reported nearly 1.96 crore persons engaged in 2023–24. The longer support period is intended to encourage sustained expansion, though it does not guarantee a structural shift.

PMVBRY addresses a narrow employment problem: the limited availability of regular, salaried work. It targets formal jobs recorded through the Employees’ Provident Fund Organisation. It is not an employment guarantee and does not cover every worker who needs income or work.

The scheme does not directly address self-employment, casual labour, agricultural underemployment, or informal jobs. This matters because agriculture employed 43 per cent of workers in 2025, while 56.2 per cent of workers were self-employed and 20.2 per cent were casual labourers.

The remaining challenge is therefore broader than placing people on formal payrolls. PMVBRY may encourage a transition into stable employment, but its payments are tied to eligible EPFO-covered jobs. It does not directly solve low or uncertain incomes among workers outside that system.

A formal job, in the article’s framework, is regular payroll employment recorded through the Employees’ Provident Fund Organisation. This separates it from self-employment, casual labour, and informal work. Formal employment matters because it can provide workers with social security and a more predictable source of income.

PMVBRY uses EPFO coverage as its central gateway. A first-time worker entering an eligible EPFO-covered job can receive Part A’s one-time incentive. An employer creating an additional qualifying job can receive Part B support. The scheme therefore connects financial incentives with formal payroll registration.

This focus responds to India’s employment structure. In 2025, only 23.6 per cent of workers held regular wage or salaried jobs. EPFO-linked employment can make work more stable, but PMVBRY does not directly cover the majority who are self-employed or casual labourers.