Sizing up the 3 new job incentive schemes announced in the Budget

livemint.com:

Read this | Mint Primer: The budget in 5 minutes The one thing we know is the three schemes are framed in formal-sector employment. This takes the shape of workers being registered with the Employees’ Provident Fund Organisation (EPFO), which is mandatory for firms with 20 employees or more. In the last few years, net new EPFO enrolments have risen progressively, with first-time employees aged 25 years and below accounting for about 50% of net additions to EPFO payrolls.

Between 2021-22 and 2023-24, an average of 6.3 million new EPFO members aged 25 and under were added annually. If each were to receive the maximum ₹15,000 , as per one of the three schemes, it would cost the government approximately ₹9,500 crore, though this amount could be lower depending on any duration clauses. In 2022-23, while there were 277 million EPFO members, only 68 million were ‘active’—at least one EPFO deposit was made in their account over the past year.

Additions to the EPFO subscriber base do not necessarily indicate new job creation. Rather, at most, they indicate the size of the formalised workforce, with a substantial proportion of enrolments likely to be of workers who were formerly casual workers and have been ‘formalised’. The government’s Periodic Labour Force Survey (PLFS) annual report for 2022-23 estimates that only around 20% of the workforce were regular wage or salaried workers.