By Rabindra Nath Sinha
KOLKATA: The Union government’s employment-linked incentive schemes (ELIS), one of which is pompously christened ‘Atmanirbhar Bharat Rozgar Yojana’, suffers from several deficiencies and it is open to doubt whether in the long run, ELIS can fulfill the prime objective of reducing ever increasing unemployment. This is the assessment of trade unions (TUs) which have studied the implementation of ELIS since their introduction in recent years. TUs have brought the shortcomings to the notice of the Union labour ministry and sought remedial measures. Instead of recognizing the deficiencies, the powers-that-be continue to make much of ELIS as a counter to the Opposition charge of utter failure on the part of the Bharatiya Janata Party-led NDA regime in bringing about a qualitative change in the labour market situation.
In a recent letter addressed to Union labour & employment minister Mansukh Mandaviya, United Trade Union Congress (UTUC), while generally appreciating the broad objectives, has pointed out several practical problems that have a bearing on the operational, financial and systemic aspects of the Employees Provident Fund Organisation (EPFO) under which new hires have to be registered. Under the schemes, the government pays part or full EPF contributions to reduce the burden on employers. But, EPFO has no control over whether jobs created are stable and secure and if employees are removed after the subsidy period and if those persons are not employed thereafter, the Universal Account Number (UAN) will be just a number without proper employment. ELIS becomes more of a pious intention.
Then, there is every possibility that employers may hire workers temporarily to derive benefits from the incentive available and then lay them off once the benefit period ends. This distorts EPFO records, showing an ‘artificial’ rise in employment without long-term continuity of contribution. Thus, the organization ends up managing a substantial number of short-term accounts, which impacts fund stability. UTUC general secretary Ashok Ghosh told IPA TUS have learnt to their utter surprise that already cases have been reported of misuse and fraud which can be traced to employers splitting employees into multiple UANs and also showing old workers as ‘new’ to claim subsidies. Thus, it becomes incumbent upon EPFO to detect and prevent fraudulent claims, which undermine the system’s credibility.
As the government pays the EPF contribution, the inflow to EPFO fund ‘appears’ normal, but it does not reflect the employer’s commitment to employee welfare. Once the scheme duration ends, there is often a drop in contributions, weakening the sustainability of the PF corpus over the long term.
For removing the inherent weaknesses, UTUC’s letter to the Union labour minister has suggested four action points as an integral part of ELIS. First, ELIS should be complemented with skill development. Secondly, labour-intensive sectors and rural areas have to be prioritized. Thirdly, a robust evaluation framework has to be put in place. Fourthly ELIS should be “aligned with broader socio-economic goals beyond GDP growth”, Ghosh informed IPA.
If these action points are not an integral part of the broader ELIS objectives, “there is a risk that the incentives will benefit large corporates, while leaving the country’s vast unemployed and under-employed population behind, “as indeed has been the ground reality in the past several years”, the UTUC general secretary observed citing TUs’ assessment and apprehensions. Instead of spurring formalization and stable employment generation, for EPFO operational strains may assume worrisome proportions if the desired focus on retention and quality of employment is missing. From time to time, New Delhi has been found claiming that ELIS has boosted the number of persons who have been gainfully employed ; but the Opposition and TUs suspect ‘lot of water’ in those figures, And, there persisting apprehension is that the social security framework that EPFO stands for will be in jeopardy if correctional measures as suggested by TUs are not acted upon by the authorities at the earliest.
Meanwhile, in a communication to Union minister of state for labour & employment Shobha Karandlaje, UTUC has deplored the Centre’s continuous neglect of TUs’ demand, court cases and parliamentary committee’s recommendation regarding raise in the minimum EPFO pension to Rs 3,000 ‘or more’ from the existing Rs 1,000 per month. Time and again TUs have argued that the government just does not have the political will to correct a gross injustice that is being perpetrated on lakhs of workers who are being forced to accept a meagre amount.
This is despite the fact that under the Atal Pension Yojana, the minimum pension being paid is Rs 3,000 per month. The Employees Pension Scheme (EPS) 1995 under EPFO covers workers who have contributed to the formal economy for decades and were required to fulfil ‘mandatory’ contribution-related norms. This reality is not being recognized by the decision-makers, particularly the finance ministry. What is more disturbing is the government does not bother to answer questions in Parliament about a respectable increase in the EPS amount. The latest example of bypassing by the treasury side a relevant question – no. 57C – was available on July 24, it has been pointed out in the communication. (IPA Service)
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