The government claimed that such measures in the past have been paying dividends and would result in the creation of 70 lakh jobs this year as per an independent study.
The Budget 2018-19 also proposed to bring in the liberalised scope of employment generation incentives available under 80-JJAA of the Income Tax Act.
The minister said, "In order to encourage the creation of new employment, I propose to extend this relaxation to footwear and leather industry. Further, I also propose to rationalise this deduction of 30 percent by allowing the benefit for a new employee who is employed for less than the minimum period during the first year but continues to remain employed for the minimum period in the subsequent year."
Commenting on these budget proposals, Bharatiya Mazdoor Sangh Zonal Secretary Pawan Kumar said, "This budget is a total disappointment. The proposal to reduce women's EPF contribution to 8 percent from existing 12 percent of wages would be possible only after the amendment in the Employees' Provident Fund and Miscellaneous Provisions Act."
He further said that the government had earlier decided to make provident fund contributions optional for employees in apparel and made-ups sector under a policy but it could not be implemented because the Act was not amended for the purpose.
Similarly, he said that the proposal to reduce women's EPF contribution would require an amendment in the Act and seems more like a populist announcement in view Lok sabha polls due next year.
Under the social security scheme run by the EPFO, the employees contribute 12 percent of their basic wages which goes into their Employees Provident Fund account. Employers also make a matching contribution of 12.5 percent out of which 8.33 percent goes into Employees Pension Scheme and 3.67 percent is deposited into employees' EPF account. The employer also pays 0.5 percent of basic wages towards Employees' Deposit Linked Insurance Scheme.