Months after a high-level panel meeting was held to discuss the wage threshold for the Employees’ Provident Fund Organisation’s (EPFO), the Government is mulling over revising the wage ceiling for the flagship retirement saving scheme soon, several media outlets reported.
A hike in the EPFO wage ceiling will increase the contribution made by both employees and employers and help workers save more for their retirement. The increase will also bring more workers under the EPFO’s social security coverage.
The wage limit for the EPFO's Employees' Provident Fund (EPF) scheme at present is Rs 15,000 per month. News agency PTI had earlier reported that there were demands and deliberations to raise the threshold monthly basic wage to Rs 25,000, but the proposal was not approved.
The EPFO wage ceiling was last revised in 2014 when it was hiked to Rs 15,000 per month, up from Rs 6,500.
As per industry estimates, raising pensionable pay could have brought 50 lakh more formal sector workers under the ambit of EPS-95.
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As per the latest government data, the formalisation of the workforce under the EPFO jumped by 9.1 per cent in September to 1.68 million compared to 1.54 million added in September last year. The net enrolment during the month is 21.85 per cent higher than the monthly average recorded during the last fiscal.
However, on a month-on-month basis, data shows a fall in the number of formal jobs created in September to 930,000, a decline for the second consecutive month.
In August, 10,26,274 new subscribers enrolled with the EPFO, down from 11,42,149 in July. The Centre for Monitoring Indian Economy (CMIE) data showed that unemployment in September dropped to a four-year low of 6.4 percent, while, in October, it shot up to 7.8 percent.
"A proposal for an increase in the wage ceiling from Rs 15,000 per month to Rs 25,000 per month for coverage under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 has been submitted by the Employees' Provident Fund Organisation (EPFO). No decision in this regard has been taken," former labour minister Bandaru Dattatreya had said in a written reply in the Lok Sabha in December 2016.
In April 2019, the apex court had dismissed a special leave petition filed by the EPFO against the Kerala High Court judgment. In January 2021, the apex court recalled the dismissal order in the review petitions filed by EPFO. In February 2021, the Supreme Court restrained the high courts of Kerala, Delhi, and Rajasthan from initiating contempt proceedings against the Centre and EPFO over the non-implementation of their verdicts.
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