Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)

At a Glance

• Ministry Labour and Employment
• Launched 1 April 2016
• Type Central Sector scheme
• Implementer EPFO
• Status Subsumed into ABRY in 2020; successor is the ELI scheme
• Exam link UPSC Prelims, Current Affairs and Government Schemes: Employment and Livelihood Schemes

Where Does It Fit?

This is the first topic of the macro on employment and livelihood. It shows the oldest model of Indian job schemes, a payroll incentive to the employer, which the later pages on Atmanirbhar Bharat Rozgar Yojana and the new incentive scheme repeat in new forms. Previous topic: Senior Citizens’ Welfare Schemes and the National Programme for Senior Citizens. Next topic: Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY).

How Did PMRPY Work?

What Happened to PMRPY and What Replaced It?

• Merger: From 1 October 2020 the Atmanirbhar Bharat Rozgar Yojana took over new registrations, as in Atmanirbhar Bharat Rozgar Yojana. PMRPY benefits to employees already registered continued for the three-year period
• Why it was changed: PMRPY had slow uptake in its first years, partly because employers did not know the scheme and partly because only new hires over their earlier payroll count qualified
• Next form: The Union Cabinet approved the Employment Linked Incentive scheme on 1 July 2025, now named Pradhan Mantri Viksit Bharat Rozgar Yojana, with an outlay of Rs 99,446 crore to support jobs created between 1 August 2025 and 31 July 2027
• Part A of the new scheme: One month of wages up to Rs 15,000 paid in two instalments to first-time employees registered with the EPFO
• Part B of the new scheme: Incentive to employers up to Rs 3,000 a month for each additional employee for two years, extended to the third and fourth year for manufacturing
• Reported progress: As reported in 2026, more than 55 lakh first-time employees were enrolled by early 2026, with later reports giving higher numbers. Figures differ by date, so quote them with the month

What Else Should You Remember?

• Subsidy design: The Pradhan Mantri Rojgar Protsahan Yojana did not pay the worker. It paid the employer for new employees, which makes it an incentive on the demand side of the labour market
• Link with EPFO: Every beneficiary needed a Universal Account Number, so PMRPY pulled workers into provident fund, pension and the insurance cover under the Employees Deposit Linked Insurance Scheme
• Contribution rates: The normal employer share is 12 per cent of basic wages: 8.33 per cent goes to the Employees Pension Scheme and 3.67 per cent to the Employees Provident Fund
• Wage ceiling: The Rs 15,000 monthly ceiling matches the statutory wage limit used for compulsory EPF coverage
• Target: The scheme aimed to help a very large number of workers enter formal employment, and the actual take-up was lower than first projected
• Registration link: Workers did not apply. The employer reported them through the Electronic Challan cum Return
• Policy lineage: A short chain runs from PMRPY, 2016, to ABRY, 2020, to the Employment Linked Incentive scheme, 2025
• Related scheme: For rural skilling and placement, see Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
• Labour codes: The four labour codes, notified in November 2025, reshape the social security framework in which such incentives work
• Evaluation concern: An incentive that pays for hiring may subsidise jobs that the employer would have created anyway, which is called deadweight loss
• Informality: More than 90 per cent of Indian workers are in informal work, so payroll subsidies reach only the formal part
• Prelims angle: Questions ask which ministry runs it, which agency implements it and what the Government pays

Why Does It Matter for the Exam?

1. Ministry and agency: Labour and Employment, with EPFO as implementer
2. Rates: 8.33 per cent for EPS first, then 12 per cent for EPF plus EPS
3. Duration: Three years of payment for each new employee
4. Wage limit: Rs 15,000 a month
5. Chain of schemes: PMRPY, then ABRY, then the Employment Linked Incentive scheme

As an analytical point, payroll subsidies can speed up formalisation but cannot create jobs where demand is weak. A scheme that is simple for small employers, paid on time and linked to skilling gives better results than a larger subsidy with heavy paperwork.

Why Is This Topic Important?

• Ministry and agency Direct one-liners
• Rates and limits Numbers asked in statements
• Successor schemes Chain of ABRY and ELI

What Came Next?

The next topic moves from payroll incentives to skilling of rural youth under Deendayal Upadhyaya Grameen Kaushalya Yojana. Next topic: Deendayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY).

Key People and Terms

• PMRPY Employer incentive for new hires
• EPFO Provident fund body
• EPS Employees Pension Scheme
• UAN Universal Account Number
• Deadweight loss Subsidy for jobs that would exist anyway
• Formalisation Moving workers into registered jobs

Exam Corner

Mains Angle

Questions on employment schemes ask whether incentives create real jobs. These points give a balanced frame.

• Merits Formalisation, social security and lower hiring cost
• Limits Deadweight loss, low awareness and reach limited to formal firms
• Way forward Link incentives to skills, simplify claims and measure net new jobs