900,000 ‘Old’ Workers Shown as ‘New’ in Scheme Modi Govt Used to Play up Job Creation: Report

New Delhi: As many as 900,000 beneficiaries of the flagship Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) – a scheme meant for ‘new’ jobs – have been found to be ineligible for the scheme, as they were already part of the formal economy.

As a result, about 80,000 companies have been found duping the system by taking financial incentives worth Rs. 300 crore from the Central government for a scheme that was designed to incentivise employers for generation of new employment, reported Business Standard on Thursday, which has reviewed government documents concerned.

Interestingly, the data from the same scheme was used ahead of the 2019 Lok Sabha Elections by the Modi government to burnish its credentials on the jobs front, warding off the Opposition’s criticism on not generating enough employment.

According to the Business Standard report, till July 16 this year, 898,576 employees – roughly 7% of the total number of beneficiaries – were found to be those who already had an old provident fund (PF) account, whereas the scheme was meant only for PF accounts of the newly hired workers.

As a result, the PF accounts of these employees have been blocked by the Employees’ Provident Fund Organisation (EPFO), so far recovering Rs. 222 crore from employers, documents reviewed by Business Standard reveal.

Having promised, in the run-up to the 2014 General Elections, to create two create new jobs every year, the Modi government found itself in a tight spot as the Opposition repeatedly took the ruling BJP government to task over rising unemployment rates.

In a face-saving move ahead of the 2019 Lok Sabha polls, the Modi government even sat on the National Sample Survey Organisation’s employment survey for 2017-18 for almost six months, which even led to the resignation of the two remaining independent members of the National Statistical Commission.

The survey was released after the Modi government retained power pegged joblessness at 6.1%, the highest in the last four decades.

Meanwhile, to counter the upbraiding of the Opposition before the elections, the Modi government sought to turn the glare to the EPFO payroll database, which takes into account the PMRPY beneficiaries.

Pointing towards creation of formal jobs in the economy, Prime Minister Narendra Modi said, in an email interview to Hindustan Times that over 70 lakh jobs were created in 2017-18. The figures, he claimed, were according to the study based on EPFO data.

Terming the criticism of jobless growth during the National Democratic Alliance (NDA) government as “spurious”, the same figures of job creation were reiterated by NITI Aayog Vice Chairman Rajiv Kumar in December 2018. “According to EPFO data, 70 lakhs jobs were created in 2017-18,” The Hindu reported him as saying.

Moreover, Economic Times in November 2019 reported creation of as many as 8.5 million jobs under the PMRPY scheme, which had targeted 10 million jobs by March 2019.

This helped the Modi government, which found its back up against the wall ahead of the 2019 elections contest, to stay in the political discourse, taking refuge in the numbers provided by the EPFO.

However, with holes now reported within the scheme itself, this is another cause of embarrassment for the Modi government.

Launched in 2016, the scheme was designed wherein the government would pay full employer’s contribution towards Employees’ Provident Fund and Employee Pension Schemes from April 1, 2018 for three years. The idea was that it will incentivise the employers for increasing the employment base of workers in the establishment and extend social security benefits to them.