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. 

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• 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

• o 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.
• o 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.
• o This component is expected to benefit around 1.92 crore first-time employees.

• Part B: Incentives for Employers

• o Employers generating additional employment are eligible for incentives of up to ₹3,000 per month per additional employee.
• o 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.
• o The scheme is expected to incentivise the creation of nearly 2.6 crore additional employment opportunities.

• Progress Achieved

• o 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.
• o Around 20 lakh youth have completed six months in their first jobs under the scheme.
• o Nearly 10 lakh beneficiaries have received incentives, with more than ₹2,000 crore transferred directly into their bank accounts.
• o 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.

Sources:
PIB
The Hindu