Finance Minister of India

2008.01.17

Incentive to employers for providing regular employment to physically challenged persons

There can be no one who is not moved by the plight of the physically and mentally disabled persons. Some time ago, I asked myself whether anything could be done to give a measure of dignity to these persons. I concluded that if they can be found a job, that would make a big difference to their lives. The job should not be casual or sporadic or transient. It must be regular employment.

2. Hence, in my Budget Speech of 2007-08, I announced that:
"In order to incentivise employers in the organised sector to provide regular employment, I propose a scheme whereunder Government will reward the employer once the physically challenged employee is regularised and is enrolled under the Employees Provident Fund (EPF) and the Employees State Insurance (ESI). Under the scheme, Government will reimburse the employer's contribution to the EPF and ESI for the first three years. Government is ready to support the creation of about 100,000 jobs every year for physically challenged persons with a salary limit of Rs.25,000 per month. I estimate the cost to Government at Rs.150 crore per annum rising to Rs.450 crore per annum when the scheme is fully rolled out. I have therefore earmarked Rs.1,800 crore."

3. Ministry of Social Justice and Empowerment has worked hard over the last ten months to put together a scheme for providing regular employment to such challenged persons. Cabinet Committee on Economic Affairs has approved the proposal today. The salient features of the scheme are:-

(i) The scheme will be applicable for the employees in the private sector.
(ii) It will cover persons with disabilities as defined under the PWD Act, 1995 and the National Trust Act, 1999.
(iii) Conditions for eligibility to get the benefit under the scheme would be fourfold:

      (a) Employee has to be disabled having a certificate issued by appropriate authority prescribed for the purpose;
      (b) Monthly wage of the employee should be up to Rs.25,000;
      (c) Benefit of the scheme will be for a maximum of three years;

(iv) The Government will contribute employer's share as prescribed for the EPF, EPS and EDLI schemes under the EPF Act and the ESI schemes for a maximum period of three years.

(v) The administrative charges of 1.1% of the wages to be paid to EPFO will continue to be paid by the employer.

(vi) The operational mechanism for the proposed scheme would be that the Ministry of SJ&E would make available to the EPFO and ESIC lump sum funds by way of advance. This would be used for the purposes of adjustment of individual claims received from the employers under the scheme. The amount with the organizations would be replenished periodically. To begin with, the amount of advance for the purpose would be Rs.5 crores each for the two organisations. Considering the requirement, this can be subsequently enhanced. The advance amount provided to EPFO and ESIC would be subject to quarterly review by an Empowered Committee chaired by the Secretary, Ministry of Labour and Employment.

4. The scheme will be implemented over a four year period at a cost of Rs.1,800 crore.

5. Now, it is over to the employers. This is a challenge they must meet and show that they care for the physically and mentally challenged persons.

6. It is my hope that over a period of 12 months, we can find jobs - regular employment - for a 100,000 disabled persons. y.