EPF stats stump naysayers, add record 1.01 crore in six months

EPF stats stump naysayers, add record 1.01 crore in six months

- in Analysis, economy, Special Post

The Employees Provident Fund Organization (EPFO) enrolled 1.01 crore workers through its Employees’ Enrollment Campaign, which ended on June 30. Under it, employers got the opportunity to file declarations for unregistered employees with a nominal fine of Rs. 1 a year.

The EPFO, captained a humongous drive called the Employee Enrollment Campaign 2017, an amnesty scheme seeking to allow employers to enroll eligible workers, who were previously not registered with the EPFO. It provided an opportunity to all employers to voluntarily declare details of all such employees who were entitled to PF membership between April 2009 and December 2016 but could not be enrolled for any reason.

Employee Provident Fund (EPF), a corpus amount deducted monthly at the rate of 12 per cent of the basic pay, is a boon for employees’ sunset years. Providing a tax deduction in the year of contribution and a tax-free withdrawal in the year of retirement, EPF governed by the Employees Provident Fund and Miscellaneous Provisions Act, 1952 is among the most indispensable yet effective social security programme for the workforce of India.

The body has added 10,131,453 subscribers under the new scheme, higher than its expectation of 10 million new ones. Most of the rise has come from urban areas such as Mumbai, Delhi and Bengaluru — Mumbai has added the highest number of subscribers, at 1,287,500.

In further developments, EPFO may bring around 500 numbers of private provident fund (PF) trusts within its cover, the EPF accumulations of which are around Rs. 1 crore each, or have up to 20 members, for offering better services to those subscribers. This will also improve the monitoring of over 1,000 such trusts which have a large subscriber base and manage huge EPF accumulations.

The labour ministry is in the process of amending Employees’ Provident Fund Scheme 1952, including inter alia, exempting such small trusts from filing EPF returns for a period of 180 days after which they would lose the exemption.

EPFO has recently joined hands with a group of banks, including ICICI Bank and Kotak Mahindra Bank, in a move to expand its service offerings and reduce transaction cost by at least Rs. 300 crore a year.

On the one hand, the move will help EPFO become more customer friendly by allowing employers and employees to remit and receive provident fund contributions/withdrawals and pension claims from many banks. On the other, it would help the organisation save Rs. 300 crore a year in transaction expenses.

Providing further ease, the EPFO aims to help one million of its subscribers build or buy homes over the next two years. The EPFO has recently signed an agreement with the Housing and Urban Development Corp. Ltd (Hudco) to help EPF subscribers get hassle-free loans. Hudco will also help EPF subscribers avail subsidy under central government schemes.

Witnessing such wide reaching initiatives of the government and EPFO, one sees dawn of a new era of flexibility and ease of practice in one of the most important retirement corpus of India, surely  a step in the right direction.

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