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Budget 2018
Last Updated : Feb 22, 2018 12:38 PM IST | Source:

Union Budget 2018 proposal to cut women's EPFO contribution met with opposition

The labour and the finance ministry will carry out further deliberations over the issue.

The Union Budget proposal to reduce the contribution of women workers to the Employees’ Provident Fund Organisation (EPFO) has met with opposition from both sides of the establishment.

A Business Standard report quoted the Labour and Employment Ministry Secretary M Sathiyavathy saying there were apprehensions on both sides over the proposal, and they are yet to decide on the issue.

Trade unions argue that the move would not incentivise people to hire more women employees, hurting their social security savings of workers instead.

Employees and employers are mandated to contribute 12 percent of the monthly income towards the provident fund and pension schemes under the EPFO, along with an additional 0.5 percent towards the EPFO’s Employees’ Deposit linked Insurance (EDLI) Scheme and 0.65 percent as administrative charges for the maintenance of the EPFO accounts.

The central board of trustees also decided to lower the administrative charges for employers from 0.65 percent of the workers’ monthly income to 0.5 percent.

Finance Minister Arun Jaitley in his Budget speech had said contribution of women employees to the EPFO will be reduced to 8 per cent for the first three years without employers’ contribution being reduced. He had said the move will allow more women to get into the formal economy.

The labour and the finance ministry will carry out further deliberations over the issue.

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First Published on Feb 22, 2018 12:38 pm
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