Understanding the PM-VBRY Scheme
The Pradhan Mantri Viksit Bharat Rojgar Yojana (PM-VBRY), which came into effect on August 1, 2025, is an incentive-driven programme designed to boost formal employment. The scheme, administered through the Employees' Provident Fund Organisation (EPFO),
works by encouraging businesses to hire new workers and bring them into the fold of the organised sector. This process, known as formalisation, means employees receive job contracts, social security benefits like a provident fund, and legal protections. The scheme offers a two-part incentive: one for first-time employees and another for the employers who hire them, aiming to create a more stable and secure workforce.
The 72 Lakh Milestone
The claim of over 72 lakh first-time employees joining the formal workforce marks the scheme's performance in its first year, from August 2025 to July 2026. A 'first-time employee' under this scheme is an individual who has not previously had an Employees' Provident Fund (EPF) account. Their entry into the EPFO system is a key indicator of their transition from informal or no employment to a formal job. The PM-VBRY aims to generate over 3.5 crore jobs in total by its conclusion on July 31, 2027, with a specific target of 1.92 crore first-time employees. The 72 lakh figure, therefore, represents significant progress towards this ambitious goal.
Incentives Driving Formalisation
The scheme's design directly incentivises both sides of the employment equation. First-time employees earning a gross salary of up to ₹1,00,000 per month receive a one-time incentive equivalent to one month's EPF wage, capped at ₹15,000. This is paid in two parts: the first after six months of service and the second after twelve months, conditional on completing a financial literacy course. Employers are also rewarded for creating and sustaining new jobs, receiving monthly incentives for each additional eligible employee. This dual-pronged approach helps offset hiring costs for businesses and provides a direct financial benefit to new entrants, making formal employment more attractive.
Who Are the New Workers?
While specific demographic data for the 72 lakh beneficiaries is emerging, general EPFO payroll trends show that a large percentage of new members are young adults. Typically, the 18-25 age group dominates new enrolments, representing youth who are most likely first-time job seekers. Under PM-VBRY, nearly 30% of the beneficiaries so far have been women, indicating a move towards a more inclusive organised workforce. This focus on bringing young people and women into the formal sector is crucial for harnessing India's demographic dividend and promoting equitable growth.
The Bigger Picture: Challenges and Opportunities
While the 72 lakh figure is a positive sign, it's important to see it in the context of India's vast labour market, where the informal sector still employs the majority of the workforce. Schemes like PM-VBRY, and its predecessors like the Aatmanirbhar Bharat Rojgar Yojana (ABRY) and Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), have consistently used the EPFO framework to formalise jobs. The success of such initiatives is a critical step, but challenges remain. The key is not just creating formal jobs but ensuring they are sustainable, offer fair wages, and provide long-term career growth beyond the incentive period. The push towards formalisation also enhances the government's tax base and improves economic data collection, which is vital for policymaking.
