Employees’ Provident Fund Current Affairs - 2020
On May 5, 2020, the Employees Provident Fund Organization has released Rs 764 crores to the pensioners.
Around 135 field offices of the scheme processed the payment. This has been done in advance to avoid inconvenience of the pensioners during lock down. The bank branches all over the country have been directed to make sure the pension is credited on time.
The EPFO is Employment Provident Fund Organization. It was established under the act EPF and Miscellaneous Provision Act, 1952. The EPFO scheme is implemented by the Ministry of Labour and Employment.
EPFO Scheme, 1952
It was the first EPFO scheme launched by GoI. It paid the labourers accumulated amount and interest upon death and retirement. It allowed partial withdrawals for marriage, education, house construction and illness.
EPF Scheme 1995
The scheme benefitted disabled survivors that faced accidents during duty, widower and children.
In 2014, Universal Account Number was launched for Employees that benefitted through EPFO. In 2018-19, over 61 new subscribers joined the scheme
Social Security Code Bill, 2019
The bill was introduced in 2019 to reduce employee contribution to Provident Fund. The PF has two components namely Employees part and employers’ part. The employees part currently stands at 12% of the basic salary. The bill intends to provide an option to the employees to reduce their contribution.
Tags: Employee Provident Fund (EPF) • Employees' Provident Fund • Employees’ Provident Fund Organisation (EPFO) • EPFO • Ministry of Labour and Employment
The Prime Minister while addressing the Lok Sabha made the following claims about the creation:
- New jobs were created in the unorganised sector, which accounts for 80-85 per cent employment.
- PM cited an increase in the sale of commercial vehicles, infrastructure building and housing activities as evidence for the claim.
- PM further said that 1.8 crore people had enrolled in the Employees’ Provident Fund (EPF) in the past 15 months, and 64 per cent of them, who were below the age of 28 were first-time employees.
- PM also cited data showing an increase in the registration of employees under the National Pension Scheme (NPS) from 65 lakh in March 2014 to 1.2 crore till October 2018.
Why the critics claim this argument as flawed?
The critics refuse to buy these data on job creation based on the following grounds:
- Considering the EPF enrolments as a reflector of job creation is not correct as it can be the formalisation of informal jobs.
- Enrolment for the EPF does not necessarily mean that the person has got a job. It is most likely that the person has enrolled for the EPF for the first time though he/she had a job for a long time.
- As per the law, an employer with 20 people or more is required to register with the EPFO. If a firm had 19 employees till yesterday and today 20th person joins in, then all 20 would be enrolled for the first time. Hence what is perceived as 20 jobs created is actually one.
- PM also said that new 6.35 lakh new non-corporate taxpayers such as doctors must have provided jobs in the past four years. Experts call it “incomprehensible” in the absence of the source of the data.
- As per data from CMIE India’s unemployment rate shot up to 7.4 per cent in December 2018 and the number of unemployed increased by a substantial 11 million – the highest in 15 months.
Further critics cite the alleged data from the NSSO survey which is said to be withheld by the government. It is said that the report puts the unemployment rate at 6.1 per cent in 2017-18, post-demonetisation. It is the highest level of unemployment since 1972-73 – the period since when the jobs data is comparable.