ABRY Scheme Analysis: Lessons from the Aatmanirbhar Bharat Rojgar Yojana

Overview : The Aatmanirbhar Bharat Rojgar Yojana (ABRY) represents one of India’s most significant post-pandemic employment recovery initiatives, operating from October 2020 to March 2022. Launched as part of the Aatmanirbhar Bharat 3.0 package, this scheme provided unprecedented government support to employers and employees during the COVID-19 economic crisis. By analysing ABRY’s structure, implementation, and outcomes, businesses can gain valuable insights into government employment policy approaches and prepare for future economic challenges.

What Was the ABRY Scheme? 💼

The Aatmanirbhar Bharat Rojgar Yojana was launched on October 1, 2020, to incentivise employers for creating new employment and restoring jobs lost during the COVID-19 pandemic. According to official PIB documentation (PRID: 1843402), ABRY was implemented through the Employees Provident Fund Organisation (EPFO) to reduce the financial burden on employers across various sectors.

ABRY operated on a unique dual-contribution model where the Government of India credited both employee and employer EPF contributions for eligible new hires. This approach directly absorbed the entire social security cost burden from businesses, making new hiring financially attractive during economic uncertainty. The scheme targeted employees earning less than Rs. 15,000 monthly who were either new to formal employment or had lost jobs during the pandemic.

ABRY Implementation Timeline & Key Statistics 📊

Source: PIB Press Release PRID: 1843402, Ministry of Labour and Employment

ABRY Scheme Structure: How It Worked 💰

ABRY provided government funding for both the 12% employee contribution and 12% employer contribution to EPF, effectively reducing employer payroll costs by 24% for eligible new hires. This substantial financial relief made hiring decisions attractive when businesses were conserving cash.

The scheme focused on genuinely new employment creation. Eligible employees included those not working in any EPFO-registered establishment before October 1, 2020, and those who lost jobs during COVID-19 and remained unemployed until September 30, 2020. This targeting ensured government resources supported actual employment generation rather than subsidising existing jobs.

ABRY’s two-year benefit period provided sustained support, allowing businesses to establish stable employment relationships while economic conditions normalised.

Target Demographics and Coverage Analysis 🎯

ABRY targeted the lower-income formal sector by focusing on employees earning up to Rs. 15,000 monthly. This demographic represented the most vulnerable workers during the pandemic and offered the largest potential for formal sector growth.

The scheme’s success in supporting over 60 lakh beneficiaries demonstrates strong market demand for employment support during recovery. The close alignment between scheme enrollments and final beneficiary numbers reflects effective implementation and sustained employment relationships.

The participation of 1.50 lakh establishments across diverse sectors indicates broad adoption, suggesting the scheme’s design successfully appealed to employers across different industries and business sizes.

Policy Innovation and Government Approach 🚀

ABRY represented significant policy innovation through its comprehensive financial support model. Unlike previous schemes providing partial employer contribution reimbursement, ABRY’s full dual-contribution coverage demonstrated government recognition of extraordinary circumstances requiring exceptional responses.

The scheme’s implementation through the existing EPFO infrastructure showcased effective leveraging of established administrative systems for rapid deployment. Rather than creating new structures, ABRY utilised EPFO’s existing mechanisms, enabling a quick launch while ensuring compliance.

ABRY’s extension from June 2021 to March 2022 reflected adaptive policy management based on implementation experience and economic conditions.

Business Impact and Employer Response 📈

The participation of 1.50 lakh establishments indicates significant employer adoption across various business sizes and sectors. This broad participation suggests the scheme’s financial incentives were substantial enough to influence hiring decisions with streamlined administrative processes.

ABRY’s impact on business cash flow was substantial, with employers saving 24% of wages on new hires for two years. This relief enabled many businesses to maintain or expand their workforce sooner than possible without government support.

The scheme’s focus on EPFO-registered establishments reinforced the formal sector compliance importance while providing immediate benefits to compliant employers.

Challenges and Implementation Lessons 🎓

The close alignment between total enrollments (approx. 60.5 lakh) and final beneficiaries reflect high scheme efficacy. The minor gap represents natural attrition and instances where employment relationships didn’t meet full eligibility criteria, highlighting the importance of clear communication on sustenance requirements.

ABRY’s extension timeline modifications highlight challenges of predicting optimal scheme duration during crisis periods. The original June 2021 deadline proved insufficient, necessitating a nine-month extension to March 2022.

The scheme’s Rs. 15,000 monthly salary ceiling, while targeting vulnerable workers, may have excluded some middle-income employees who also faced employment challenges during the pandemic.

Long-term Economic and Policy Implications 🔍

ABRY’s success in supporting over 60 lakh beneficiaries demonstrates the potential scale and impact of well-designed employment schemes during crisis periods. The scheme’s ability to operate at this scale through existing infrastructure provides confidence in India’s capacity for large-scale employment interventions.

The financial commitment of over Rs. 10,000 crore reflects the government’s willingness to make substantial investments in employment recovery. ABRY’s integration with the broader Aatmanirbhar Bharat package illustrates the importance of coordinated policy approaches addressing employment alongside other economic recovery measures.

Lessons for Future Business Planning ⚡

Businesses can prepare for future employment support schemes by maintaining robust EPFO compliance and documentation systems. Companies ready to engage with ABRY quickly likely benefited more than those requiring administrative setup time.

The scheme’s focus on new employment creation provides guidance for businesses in structuring workforce planning during uncertain periods. Understanding that government support typically targets genuine employment expansion helps businesses plan to hire strategies that align with available incentives.

ABRY’s success demonstrates the value of formal sector participation for accessing government support during crisis periods.

Conclusion

The Aatmanirbhar Bharat Rojgar Yojana stands as a landmark employment policy intervention that successfully supported over 60 lakh beneficiaries during India’s post-pandemic recovery phase. Through its innovative dual-contribution coverage and strategic implementation via EPFO infrastructure, ABRY demonstrated government capacity for large-scale, responsive employment policy during crisis periods, with financial commitment exceeding Rs. 10,000 crore and adoption by 1.50 lakh establishments. For businesses, ABRY’s legacy emphasises the importance of formal sector compliance, proactive engagement with government schemes, and understanding policy frameworks that provide significant support during economic uncertainties while contributing to broader national employment objectives.

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Editorial Team  

Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.