The government has unearthed about 80,000 companies that have duped the system by availing financial incentives worth Rs 300 crore from the Centre for a flagship scheme meant to create jobs in the formal sector, Business Standard reported.

The report suggests that nine lakh beneficiaries of its Pradhan Mantri Rojgar Protsahan Yojana (PMRPY), a job formalisation scheme, have been found to be ineligible. This is because they were already a part of the formal economy, even before the scheme was brought in.

The Employees’ Provident Fund Organisation (EPFO) has blocked the provident fund accounts of these employees, the report stated. It has, so far, also recovered Rs 222 crore from the employers concerned.

The number of beneficiaries was included in the EPFO payroll database, which is used by the government to show job creation in the formal sector.

PMRPY, a central scheme designed to incentivise employers for generating new employment, was launched in 2016.

Moneycontrol could not independently verify the report.

Under the scheme, the government pays full employers' contribution of 12 percent (towards EPF and Employees' Pension Scheme both), for a period of three years, in respect of new employees who have been registered with the EPFO on or after April 1, 2016, with salary up to Rs 15,000 per month.

The scheme is implemented by the Ministry of Labour and Employment through the EPFO.

The government claims that PMRPY has a dual benefit as the employer is incentivised for creating employment and a large number of workers would get jobs opportunities in such establishments. This gives these employees access to social security benefits of the formal sector.

In January 2019, the government had said that the number of employees benefiting from the scheme had crossed the one-crore mark.