2024-04-12 23:10:35
New Delhi: The government is making big moves to increase social security coverage. It has been reported that the salary limit under the Employees Provident Fund Organization (EPFO) can now be increased from ₹ 15,000 to at least ₹ 21,000. Doing so would be a strong step towards achieving universal social security.
reconsider the proposal
The proposal to increase the salary limit for PF was lying in cold storage for the last several years. Now this proposal is being reconsidered. An official with knowledge of the matter said, “We are evaluating all options and a decision in this regard can be taken by the new government.” According to a senior government official, the government believes that the strong balance sheet of Indian Industry will help in reducing the additional financial burden on enterprises due to the increase in wage ceiling. According to the official, raising the salary limit will have a huge financial impact on both the government and the private sector.
Lakhs of workers will benefit
The said officer said that if the government wants to bring more and more workers under the ambit of social security, then it will have to move in that direction. It is estimated that the increased wage limit will benefit lakhs of workers as the minimum wages in most states are between ₹18,000 and ₹25,000. Due to the current salary limit, they are deprived of any kind of social security.
There was a change in 2014
The last change in the salary limit under EPFO was in the year 2014. Then it was increased from ₹6,500 to ₹15,000. However, unlike this, the salary limit in Employees’ State Insurance Corporation (ESIC) is also higher than this. There has been an upper salary limit of ₹21,000 since 2017 and there is a consensus within the government that the salary limits under the two social security schemes should be aligned. It is noteworthy that both EPFO and ESIC are under the administrative control of the Ministry of Labor and Employment.
How much do employees and employers contribute to PF?
Under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, both the employee and the employer contribute equally 12% of basic salary, dearness allowance and retention allowance, if any, to the EPF account. While the entire contribution of the employee in the PF account is deposited in the provident fund account, 8.33% of the employer’s contribution goes to the employee pension scheme and the remaining 3.67% is deposited in the PF account. EPFO subscribers are entitled to provident fund, pension and insurance benefits under the EPF & MP Act, 1952.