Voluntary Retirement Scheme is a special compensation package for loss of job much before the normal retirement. Enterprises which are already closed or sick or more viable in the private management have different manpower requirements. Inevitably a portion of the workforce is reduced. VRS is an innovative measure of the government towards addressing the trauma of job loss in enterprises undergoing reforms.

Government of Andhra Pradesh has adopted a policy more attractive than the provisions available in the Industrial Disputes Act. Andhra Pradesh Government has introduced a VRS policy that is more attractive than one offered in several other states. It provides 45 days of pay per every year of service plus all other benefits. A few workers/staff interested in taking VRS could not do so as the new managers did not wish to relieve them.

VRS policy was amended on May 1 2002 to give choice to the workers/ staff of state level public enterprises to avail VRS irrespective of the view of the new management giving equal opportunities to both workers and private investors. This amendment of May 1 2002 made VRS policy more worker friendly.