PM-VBRY: Why you should proceed with caution?

PM-VBRY: Why you should proceed with caution?

The MOLE (Ministry of Labour and Employment) is back with another incentivisation scheme for generation of fresh formal employment through its Employment Linked Incentive Scheme named Pradhan Mantri Viksit Bharat Rozgar Yojana. The Centre has allocated around Rs 1 lakh crore under the scheme. The scheme seems to be an improvised version of the controversial Atmanirbhar Bharat Rozgar Yojana and has tried to plug in the lapses and gaps which existed in ABRY. However, the study of the guidelines issued and the undertaking expected from the employer requires individual assessment by the employers before proceeding to take the benefit of the scheme.

Although PM-VBRY scheme has two parallel schemes (namely Scheme A and Scheme B) benefiting the employees and employers, the below analysis is made keeping the employer in mind..Here are five reasons why you should proceed with caution before availing benefits under PM-VBRY as an employer?

1. 1)Bad ABRY Experience: Many employers had to face inquiries and demands from the authorities for gains made under ABRY scheme. Although the EPFO initially promoted the scheme and benefits, the EPFO imposed blanket restrictions and inquiries on various establishments without proper grounds merely because a handful of wrongful elements committed frauds. Further, EPFO unilaterally blocked the UAN accounts of many beneficiaries centrally thereby jeopardizing the PF accessibility to many genuine members that led to trust deficit between employees and employers.
2. 2)Penalty Clause : The guideline document has empowered the Executive Committee and the regulatory body i.e EPFO with sweeping powers for initiation of inquiry and levy of penalty for fraudulent benefits. They have been authorized to access data from various other platforms like GST, Udyam, Income Tax, etc which may result in improper parameters and use of powers by the authorities. These provisions create subjective powers in the hands of the authorities thereby putting employers who lawfully want to claim the benefit under the scanner.
3. 3)Complexity of the Scheme and Exclusions : The plain reading of the scheme guideline results in arousal of many questions than answers. The employer is expected to raise and maintain the baseline worker count and further, the scheme guideline has not clarified how the benefit will be passed on to the employers. It is not clear whether the benefit will be passed by adjusting the PF challan amount or through claim method after completion of six month period. Further, the scheme excludes employers who are undergoing 7A inquiry or any ABRY related inquiry from availing the benefits of the scheme.
4. 4)Incomplete Guidelines : Although, the MOLE has issued a detailed guideline document, Pt (6.2) which pertains to the benefits to the Employers states that the detailed guidelines for quantification of benefits will be issued separately. In absence of detailed guidelines for quantification, it is advised to adopt a ‘Wait and Watch’ approach before jumping in to the scheme and making oneself eligible.
5. 5)Undertaking from the Employer : The employer is expected to approve an undertaking on the Employer Portal of EPFO that undertake to refund the undue benefits availed along with Penal Interest before making application for availing the benefits. It goes without saying that this undertaking can come back to bite the employers in case of any inquiry by the EPFO.

Giving due credit to the lawmakers, the intention of the scheme is noble and towards nation building. However, if the MOLE wants to make employers the channel for extending the benefits, it should clear the complexities involved and build in checks before extending the benefit rather than initiating inquiries and demands after the gains are passed on.

In view of the above, it is advised to adopt ‘wait and watch’ approach before jumping into the bandwagon

CA Darshan Balai

www.payrule.in