Calcutta: Women and new employees are set to benefit as the central budget has proposed changes in the Employee Provident Fund scheme with an eye on creating more jobs. The government has announced a reduction in women employee's contribution to EPF to 8 per cent for first three years instead of 12 per cent earlier and proposed to extend the facility of 12 per cent employers' contribution by government for new employees for first the three years of their employment, across sectors.

"To incentivise employment of more women in the formal sector and to enable higher take-home wages, I propose to make amendments in the Employees Provident Fund and Miscellaneous Provision Act 1952, to reduce women employees' contribution to 8 per cent for first three years of their employment against existing rate of 12 per cent or 10 per cent with no change in employers' contribution," finance minister Arun Jaitley said .

"The government will contribute 12 per cent of the wages of the new employees in the EPF for all the sectors for next three years. Also the facility for fixed-term employment will be extended to all sectors," he said.

At present, the fixed term employment facility is available to sectors employing large number of workers such as textiles, leather and footwear. The government claimed that such measures have been paying dividends and would result in the creation of 70 lakh jobs this year as per an independent study.

"Proposed changes to PF scheme by way of Government PF contributions for new employees and reduced PF contributions by employers for women for first three years will help in promoting employment growth, and more so for employment of women," said Alok Agrawal, senior director, Deloitte Haskins & Sells.

"The proposal for the government to go out of pocket in respect of the 12 per cent contribution mandated under the EPF Act for all 'new employees' across sectors for a period of first three years, is a populist move aimed at appeasing the younger workforce in the wake of the upcoming assembly elections this year and the next year's general elections. While the source of funding by the government for the employee part of the EPF contribution is unclear for now, it would result in greater takeaway for the employees," said Anshul Prakash, partner, Khaitan and Co.