Understanding the PM-VBRY Scheme
The headline refers to the Pradhan Mantri Viksit Bharat Rojgar Yojana (PM-VBRY), a major employment-linked incentive scheme launched on August 1, 2025. It is implemented by the Employees' Provident Fund Organisation (EPFO) and aims to boost formal employment by encouraging
businesses to hire new workers and bring them under the social security net. The scheme has two main parts: it provides a one-time financial incentive of up to ₹15,000 to first-time employees who get registered with the EPFO, and it also offers incentives to employers for creating and sustaining these new jobs. With a massive outlay of over ₹99,000 crore, the government's goal is to facilitate the creation of more than 3.5 crore jobs, with a special focus on first-time entrants to the workforce.
Where Does the 72 Lakh Figure Come From?
The 72 lakh number represents the count of new employees who have been registered on the EPFO portal under the PM-VBRY scheme within its first year. The EPFO is a statutory body that manages provident fund accounts for salaried employees in the organised sector. When a person gets a formal job in an eligible company, they are assigned a Universal Account Number (UAN), and both the employee and employer contribute to their provident fund. Government schemes like PM-VBRY and its predecessor, the Aatmanirbhar Bharat Rozgar Yojana (ABRY), have used EPFO registrations as a primary metric to track the growth of formal employment. This data is seen as a high-frequency indicator of how many people are entering the formal workforce.
The Debate Over Data Accuracy
While the 72 lakh figure is impressive, economists and labour market experts advise caution. The core of the debate is whether these EPFO registrations represent genuinely new jobs or the 'formalisation' of existing ones. Formalisation occurs when a business that was previously operating informally (paying cash salaries without social security) registers its employees with the EPFO to comply with regulations or avail scheme benefits. For example, if a company grows to have 20 employees, it becomes mandatory for it to register with the EPFO. This would show up as 20 new 'formal' workers in the payroll data, even though only one new person might have been hired, with the other 19 already working there informally. Critics argue that while bringing workers into the social security net is positive, it should not be conflated with the creation of entirely new employment opportunities.
Formalisation vs. New Job Creation
The distinction is critical for understanding the health of India's job market. New job creation means the economy is expanding and generating fresh opportunities for the millions of young people entering the workforce each year. Formalisation, on the other hand, is about improving the quality and security of existing jobs. Both are important goals. A formal job provides access to a provident fund, pensions, and insurance, offering a crucial safety net that informal work lacks. However, government data based on EPFO payrolls often does not distinguish between a newly created post and a newly formalised one. Independent economists have frequently pointed out this limitation, suggesting that headline payroll numbers can paint an overly optimistic picture of net job growth.
The Bigger Picture for India's Workforce
Despite the debate, the rise in EPFO registrations under schemes like PM-VBRY points to a significant, positive trend: India's economy is gradually formalising. This shift means more workers are gaining legal protections and long-term financial security. However, the challenge of generating enough high-quality new jobs remains immense, particularly as the MSME sector faces economic pressures and large corporations report slower hiring. While payroll data is a useful tool for tracking formal sector activity, it only covers a fraction of India's total workforce, as around 80-90% of workers are still in the informal sector. Therefore, a comprehensive view requires looking at multiple data sources, including large-scale household surveys that capture the full spectrum of employment.
