“India’s demographic dividend can turn into a demographic disaster without adequate job creation and workforce formalisation.” Discuss the significance of Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY) in addressing India’s employment challenge. (10M)

India stands at a critical juncture where 65% of its population is under 35 years. Harnessing this demographic dividend is essential for sustaining high growth and achieving Viksit Bharat @2047. However, India faces challenges of youth unemployment (17.3% in urban areas, PLFS 2023-24), informality (80–85% workforce), and jobless growth.

Against this backdrop, the Government launched the Pradhan Mantri Viksit Bharat Rozgar Yojana (PMVBRY, 2024) to boost large-scale job creation, formalisation, and social security coverage.

Objectives of PMVBRY:

1. Massive Job Creation: Target of 3.5 crore jobs in 2 years.
2. Workforce Formalisation: Incentives tied to EPFO enrolment, expanding social security.
3. Support to First-Time Workers:  Direct financial aid for initial costs and savings.
4. Employer Incentives: Reduce hiring costs to encourage expansion.
5. Boost to Manufacturing: Extra benefits for long-term jobs in Make in India sectors.
6. Promote Financial Discipline: Savings-linked benefits and financial literacy modules.

Key Features:

Part A – Employees (First-Time Workers):

• Incentive: 1 month’s EPF wage (up to ₹15,000) in two instalments.
• Savings: A portion invested in deposits to encourage long-term savings.
• Eligibility: Salary up to ₹1 lakh/month.
• Expected beneficiaries: 1.92 crore workers.

Part B – Employers (Hiring Incentives):

• Incentive: ₹3,000 per new hire/month for 2 years.
• Manufacturing: Extended for 3rd & 4th year.
• Beneficiaries: 2.60 crore new jobs indirectly supported.

Delivery Mechanism:

• Direct Benefit Transfer (DBT) via Aadhaar-enabled Payment System.
• Employer incentives via PAN-linked accounts.

Significance of the Scheme in boosting employment:

1. Scale of Employment Generation:
   1. Aims to add jobs equivalent to 10% of India’s workforce entering annually.
   1. Comparable to MNREGA in terms of employment reach, but in formal sector.
2. Formalisation & Social Security: Social security coverage jumped from 19% (2015) to 64.3% (2025).
3. Boost to Manufacturing:
   1. Incentives aligned with PLI Scheme, National Manufacturing Mission.
   1. It supports Make in India especially in crucial sectors like electronics, EVs, textiles, green energy.
4. Multiplier Effect:
   1. Higher formal jobs creating higher tax base, savings, consumption.
   1. Could add up to 1.5–2% to GDP growth (NITI Aayog estimates) if implemented well.

Challenges:

1. Implementation Bottlenecks:
   1. Risk of “ghost workers” and fraudulent registrations.
   1. Small firms may avoid formalisation due to compliance burden.
2. Fiscal Burden: ₹1 lakh crore outlay (2024–26), adding pressure on fiscal deficit (expected 5.1% FY25).
3. Sectoral Gaps: Over-focus on manufacturing may leave IT, gig economy, and services underserved.
4. Sustainability of Jobs: Jobs may vanish once subsidies lapse unless supported by sustained growth.
5. Skill Mismatch: PLFS data shows that 47% graduates are unemployed, reflecting skills not aligned to industry demand.

Way Forward:

1. Skill Integration: Link PMVBRY with Skill India, PM Kaushal Vikas Yojana (PMKVY) for demand-driven training.
2. Digital Monitoring & Transparency: Real-time cross-verification via Aadhaar–EPFO–GSTN–PAN databases to prevent duplication.
3. Special Focus on Women & Rural Youth: Additional incentives for female hiring & rural employment to boost FLFP which is currently 25%.
4. Sector-Specific Expansion: Extend to green jobs, digital economy, logistics, and healthcare.
5. Independent Monitoring: Regular third-party audits, quarterly reporting for accountability.

Conclusion:

The PM Viksit Bharat Rozgar Yojana marks a structural shift in India’s labour market policy—from fragmented welfare to integrated formalisation, savings, and security. It can transform India’s demographic dividend into an economic powerhouse, paving the way towards Viksit Bharat @2047.

‘+1’ Value Addition:

• “India’s true strength lies not in its numbers, but in how we empower those numbers.” – Former President Dr. APJ Abdul Kalam
• India will add 10–12 million youth to the workforce every year till 2035.
• By 2030, India is projected to supply 22% of the global workforce as per the World Bank.
• 80–85% of India’s workforce is in informal sector, lacking social security as per World Bank.
• Global case study: South Korea used payroll-linked hiring subsidies in the 1990s to accelerate formalisation, similar to PMVBRY design

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