Key Employment Initiatives: PMRPY, PMKVY, and More

India’s biggest economic asset is also its biggest challenge: a young, growing workforce that needs jobs. With millions of people entering the labour market every year, the government cannot rely on a single solution. Instead, it has built a layered set of employment initiatives, each tackling a different part of the problem. Some push employers to hire more. Some build skills. Some encourage young people to become job creators rather than job seekers. And one important law protects the youngest from being pulled into work too early. Understanding how these schemes fit together gives you a clear picture of how employment policy actually works on the ground.

Why multiple employment schemes exist 🔗

Unemployment is not one problem. A college graduate without industry skills, a school dropout in a village, an employer hesitant to add staff, and a child pushed into labour all face very different situations. A single programme cannot fix all of these at once. This is why the government runs several targeted initiatives at the same time, each addressing a specific gap in the employment ecosystem.

These initiatives broadly fall into four categories. First, schemes that incentivise employers to create formal jobs. Second, schemes that build employable skills. Third, programmes that promote entrepreneurship and self-employment. And fourth, protective laws that keep children out of the workforce so they can study instead. Looking at each category helps you see the logic behind the policy design.

Pushing employers to create jobs: PMRPY 🔗

The Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) took a smart approach to the problem of formal employment. Instead of directly hiring people, the government paid employers to do it. Launched in August 2016 and announced in the 2016-17 Budget, the scheme was implemented by the Ministry of Labour and Employment.

How the incentive worked 🔗

Under PMRPY, the government paid the employer’s share towards the Employees’ Provident Fund Organisation (EPFO) contributions for newly hired employees. Initially this covered the 8.33% Employees’ Pension Scheme (EPS) contribution. From 1 April 2018, the benefit was expanded so the government paid the full employer contribution of 12% (8.33% EPS plus 3.67% EPF) for all sectors, for the first three years of a new employee’s job. This meant hiring a new worker became significantly cheaper for the business.

Who was eligible 🔗

The scheme targeted lower-income workers. New employees earning wages up to ₹15,000 per month qualified, while those earning above this limit did not. A “new employee” was defined as someone who had not worked in an EPFO-registered establishment before 1 April 2016 and did not previously have a Universal Account Number (UAN). Establishments needed to be registered with EPFO and hold a valid Labour Identification Number (LIN) under the Shram Suvidha Portal. The scheme had a dual benefit: employers were rewarded for expanding their workforce, while workers gained access to organised-sector social security benefits.

The terminal date for registering new beneficiaries was 31 March 2019, and the scheme was eventually closed with effect from 31 March 2022. Even so, it remains an important example of how policy can use financial nudges to encourage formal job creation rather than directly funding it.

Protecting the youngest: the Child Labour Amendment Act, 2016 🔗

Employment policy is not only about creating jobs. It is also about deciding who should not be working at all. The Child Labour (Prohibition and Regulation) Amendment Act, 2016 strengthened protections for children and brought Indian law in line with the Right to Education.

What the law changed 🔗

The amendment renamed the original 1986 law as the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, reflecting its wider scope. It introduced a complete ban on employing children below 14 years in any occupation or process. This aligned the definition of “child” with the Right of Children to Free and Compulsory Education Act, 2009, which guarantees free education to children aged 6 to 14. The idea was simple: a child of school-going age should be in school, not at work.

The law also introduced the category of adolescent for the first time, defined as a person who has completed 14 years but not yet 18. While adolescents can work, they are prohibited from being employed in hazardous occupations and processes such as mining and work involving explosives. The Central Government has the power to add or remove occupations from this hazardous list.

Stronger penalties and key debates 🔗

The amendment made enforcement tougher. Employing a child or an adolescent in violation of the law became a cognizable offence, and punishment for employers was increased to imprisonment between six months and two years, or a fine of ₹20,000 to ₹50,000, or both. The law also provided for a Child and Adolescent Labour Rehabilitation Fund to support rescued children.

However, the Act has drawn criticism. It allows children to help in family enterprises after school hours or during vacations, as long as the work is not hazardous. Critics argue this creates a loophole that could be misused, since much child labour happens within family-based and unorganised work that is hard to monitor. Another concern is that the list of hazardous occupations was sharply reduced, potentially leaving adolescents exposed in industries that are dangerous in practice.

Building employable skills: PMKVY 🔗

Even when jobs exist, many young people lack the specific skills employers want. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) addresses this skills gap directly. Launched on 15 July 2015, the scheme is the flagship skill-training programme of the Ministry of Skill Development and Entrepreneurship (MSDE) under the Skill India Mission, and is implemented by the National Skill Development Corporation (NSDC).

How PMKVY trains youth 🔗

PMKVY provides free, short-duration skill training across hundreds of job roles in sectors such as IT, healthcare, construction, and manufacturing. Training is aligned to the National Skills Qualification Framework (NSQF), which ensures a common standard of quality and makes certifications recognisable to employers. The scheme is built around three main components: Short Term Training for fresh candidates, Recognition of Prior Learning (RPL) for those who already have informal skills, and Special Projects for specific needs.

Recognition of Prior Learning is a particularly clever feature. Many workers in the informal economy already know how to do a job well but have no certificate to prove it. RPL formally assesses and certifies these existing skills, helping workers gain recognition and better wages without starting from scratch.

The bigger picture of Skill India 🔗

PMKVY has evolved through multiple phases since 2015, and over the years it has trained well over a crore individuals. In its latest phase, the scheme has added new-age courses in areas like artificial intelligence, robotics, drones, and 3D printing, while putting greater emphasis on on-the-job training. In February 2025, the restructured Skill India Programme merged PMKVY with the apprenticeship promotion scheme and the Jan Shikshan Sansthan scheme into a single central sector scheme, signalling a move towards a more unified skilling ecosystem.

Encouraging job creators, not just job seekers: PM YUVA 🔗

Skills and jobs are important, but a growing economy also needs entrepreneurs. The Pradhan Mantri YUVA Yojana (PM-YUVA), also known as Yuva Udyamita Vikas Abhiyan, shifts the focus from finding a job to creating one. Launched by MSDE on 9 November 2016, the scheme was designed as an entrepreneurship education and training programme.

What PM YUVA offers 🔗

The scheme aimed to educate and equip potential and early-stage entrepreneurs. It planned to provide entrepreneurship education and training to lakhs of students over five years (2016-17 to 2020-21), with a project cost of about ₹499.94 crore, working through a network of around 3,050 institutes. This network included institutes of higher learning, schools, Industrial Training Institutes (ITIs), and Entrepreneurship Development Centres.

A core delivery method was Massive Open Online Courses (MOOCs) designed by national and international experts, supported by classroom discussion and experiential learning. Beyond teaching, the scheme created a pathway for young entrepreneurs by giving them easy access to a mentor network, information, credit, and incubation support. It was aligned with the Startup India initiative and the broader vision of a self-reliant economy.

Rooting self-employment in rural areas: RUDSETI and RSETIs 🔗

Entrepreneurship support cannot stay limited to colleges in cities. Rural youth, who often lack access to higher education and formal jobs, need their own pathway. This is where the Rural Development and Self Employment Training Institute (RUDSETI) model comes in, and it has a longer history than most government schemes.

The origins of the model 🔗

RUDSETI began in 1982 at Ujire, Dharmasthala in Karnataka, founded by Dr D. Veerendra Heggade together with Syndicate Bank and Canara Bank. The aim was direct: to mitigate unemployment and poverty among rural youth by helping them set up their own enterprises. The institutes offer short-duration, highly intensive, residential training programmes, often with free food and accommodation, covering both technical and soft skills.

What sets the RUDSETI model apart is its long-term handholding. Trained candidates are tracked and supported for around two years after the programme, which improves the chances that their micro-enterprises actually survive. This focus on outcomes, rather than just the number of people trained, is a key reason the model has been successful.

From RUDSETI to a national network 🔗

The Ministry of Rural Development was impressed enough by this model to scale it nationwide. It advised banks to set up similar institutes, called Rural Self Employment Training Institutes (RSETIs), in their lead districts across the country. These bank-led institutes, supported by state governments, now run hundreds of branches and offer courses aligned with the NSQF. The journey from a single institute in Karnataka to a pan-India network shows how a successful local idea can become national policy.

How the pieces fit together 🔗

Looking at these initiatives side by side reveals a deliberate design. PMRPY worked on the demand side by making employers want to hire. PMKVY works on the supply side by making workers more employable. PM YUVA and the RUDSETI/RSETI network expand the idea of employment itself, encouraging people to create enterprises rather than wait for jobs. And the Child Labour Amendment Act protects the foundation of all of this by ensuring children stay in education long enough to benefit from these opportunities later.

No single scheme is a complete answer to unemployment. But together they form a more comprehensive strategy that touches employers, skilled workers, aspiring entrepreneurs, and the rights of children. The real test of any such policy lies in implementation, monitoring, and the ability to adapt as the economy changes.

What do you think? Which approach do you believe creates more lasting employment: subsidising employers to hire, or training people to start their own ventures? And do the exceptions in the Child Labour Amendment Act, such as allowing work in family enterprises, undermine its protective intent?

References

1. https://www.epfindia.gov.in/site_en/index.php
2. https://www.insightsonindia.com/social-justice/welfare-schemes/schemes-under-atmanirbhar-bharat-rojgar-yojana-abry/pradhan-mantri-rozgar-protsahan-yojana-pmrpy/
3. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1844654
4. https://www.scconline.com/blog/post/2016/09/30/child-labour-prohibition-and-regulation-amendment-act-2016-key-concerns-and-issues/
5. https://nsdcindia.org/pmkvy-overview
6. https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154880&ModuleId=3
7. https://nationalskillsnetwork.in/pradhan-mantri-yuva-yojana/
8. http://www.nacer.in/index_more.html