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EPFO fraud: 9 lakh employees from 80,000 firms duped system to benefit from govt's job formalisation scheme

These companies allegedly duped the system by taking financial incentives under Pradhan Mantri Rojgar Protsahan Yojana, which was meant to bring new employees in the formal economy

twitter-logo BusinessToday.In   New Delhi     Last Updated: February 1, 2020  | 09:08 IST
EPFO fraud: 9 lakh employees from 80,000 firms duped system to benefit from govt's job formalisation scheme
The Centre pays 8.33 per cent of the EPS contribution of the employer for new jobs under the scheme

Government has found 9 lakh beneficiaries in as many as 80,000 companies took benefit of  Centre's job formalisation scheme, Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), even though they were not eligible, leading to around Rs 300 crore loss to the exchequer.

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These companies allegedly duped the system by taking financial incentives meant to bring new employees in the formal economy, a report published in the Business Standard said. The PMRPY scheme incentivises employers registered with the Employees' Provident Fund Organisation (EPFO) for job creation by paying full contribution of employers' side to Employee Pension Scheme (EPS) and Employees' Provident Fund (EPF).

The Centre pays 8.33 per cent of the EPS contribution on behalf of the employer for new jobs.

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The government has already recovered around Rs 222 crore through EPFO after blocking provident fund accounts (over 9 lakh) in question, the daily said. The scheme was launched in August 2016 and was meant only for new employees who were hired after April 1, 2016. As per the report, around 8,98,576 employees from 80,000 companies were found to be taking benefit of the scheme till July 16, 2019.

Also read: 62.38 lakh jobs created till November in FY20: EPFO

The daily also quoted officials saying the discrepancies might have occurred due to "lack of knowledge" among employers who blamed the government for lack of checks and balances to validate employees' claims to avoid duplication of a PF account.

The PMRPY scheme is only targeted for employees earning wages less than or equal to Rs 15,000 per month. As per the scheme, a new employee is one who has not been working in an EPFO-registered establishment on a regular basis prior to April 1, 2016.

Edited by Manoj Sharma

Also read: India will create 16 lakh fewer govt jobs in FY20: SBI Ecowrap report

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