The contributions of the employees and employers towards the EPS will also increase as per the new wage ceiling. File.
| Photo Credit: The Hindu

The contributions of the employees and employers towards the EPS will also increase as per the new wage ceiling. File.
| Photo Credit: The Hindu

There is an argument, often described as techno-solutionism, that technology is the answer to every problem. Whether it is question of paper leaks or issues in EPFO management, we are repeatedly told that technology will bring transparency. What are your views on this? How has your background in technology helped you steer the EPFO and undertake major reforms, including the revamp of the income tax system?

Technology is not a solution in itself; it is an enabler. Any technological intervention must be supported by changes in processes and the legal framework. EPFO settled nearly six crore claims in 2024-25 and 8.3 crore in 2025-26 — a 30-35% increase with almost the same manpower. We expect to settle nearly 10 crore claims this year. Is it sustainable? No. One major problem was our decentralised database. Each of the 123 Regional Offices maintained its own database. We have now centralised them into a single database. While members continue to have multiple member IDs, all are now linked under one Universal Account Number (UAN) in one database. It has become easy for us to identify your total balance and complete service history.

The second challenge was that the claim withdrawal process was based on a legal framework which had different periods of eligibility. The amount that you could withdraw would vary based on your kind of need. We simplified both the legal framework and the process. There is now a uniform eligibility period of 12 months for all claim categories. We have also merged the employee’s and employer’s shares for withdrawal purposes, since the entire amount belongs to the member. Withdrawal eligibility has been simplified to either 75% of the total balance or 100% of the eligible balance after accounting for the minimum balance requirement. Members may withdraw the amount in one instalment or in multiple withdrawals, without restrictions. These reforms required changes to both the process and the legal provisions governing the scheme. The simplified withdrawal rules have now been incorporated into the EPFO software. Simplicity, I believe, is the key.

What are the biggest shifts in EPFO’s service? Is EPFO being transformed into a fully digital, paperless and member-centric organisation?

The credit for this transformation goes entirely to our Minister of Labour and Employment, Mansukh Mandaviyaji. His first instruction to us was to simplify the process. Around 80-85% of our members are blue-collar workers earning PF wages of about ₹15,000. They include security guards, data entry operators and sales representatives. His direction was clear: make it easy for them to access their own money. We have introduced a large number of simplifications. If your UAN is linked to Aadhaar and your KYC is complete, we trust the information you have provided. Bank account validation is carried out through the National Payments Corporation of India in coordination with the concerned bank. We have increased the auto-settlement limit from ₹1 lakh to ₹5 lakh.

Earlier, many claims were rejected because members were unaware of the amount they were eligible to withdraw. We have moved those validations to the submission stage, so eligibility is verified upfront. As a result, rejections have become negligible. Once your KYC is complete, we process the settlement without unnecessary hurdles. We have also introduced auto-settlement for final withdrawals and auto-approval of transfers. If your employment records, KYC details and personal particulars are in order, your PF balance is transferred automatically from your previous account. You no longer need to submit a transfer request or obtain approvals.

The Labour Codes have now been implemented, and the rules have also been notified. One concern, particularly among trade unions, is that the codes could narrow the scope of social security. There have also been reports that employers’ contributions to the PF may be reduced or kept at the minimum level. How do you respond to these concerns?

I would like to take this opportunity to allay those apprehensions. The EPF Scheme, 2026, is based on continuity. The 1952 scheme has been in force for more than seven decades, and we have not tried to touch that part. The contribution rate remains 12%, and the wage ceiling continues to be ₹15,000, as notified in 2014. The option of making voluntary PF contributions has always existed. Irrespective of the wage ceiling, many employers have continued to contribute 12% of employees’ wages towards the PF. Nothing has changed in that regard. The new scheme does provide flexibility for employers and employees who wish to adopt a different approach, but most employers are not going to change their entire contractual terms simply because the new scheme has come into force.

The Social Security Code also introduces a harmonised definition of wages and expands social security coverage to workers in the unorganised sector, as well as gig and platform workers. The EPFO today offers flexible retirement planning, competitive and compounded returns and greater convenience. Employer contributions of up to ₹7.5 lakh are exempt from tax and are not treated as part of an employee’s taxable salary. The interest earned is also tax-exempt. So, why will you not save through PF? This is the best way to save for your retirement.

Are there any plans to enhance benefits such as death insurance, the minimum pension or the wage ceiling?

The Code on Social Security gives the government the flexibility to revise the wage ceiling. As far as the EDLI scheme is concerned, we increased the minimum payout to ₹50,000 last year. Decisions on the minimum pension and the wage ceiling are policy matters that depend on budgetary support. Those are decisions for the government to take.

Will the EPFO reopen the window for higher pension?

The Employees’ Pension Scheme is a pooled fund built from the contributions of all its members. At present, membership is capped at a wage ceiling of ₹15,000. The idea was to provide a basic pension safety net for blue-collar workers and those at the lower rung of the formal sector. The scheme combines defined contributions with defined benefits. Of the employer’s 12% contribution, 8.33% is diverted to the pension scheme, while the government contributes 1.16%. Pension is then paid according to a prescribed formula.

In 2022, the Supreme Court allowed a one-time window of four months for eligible employees to opt for a higher pension. We have processed almost all the applications received under that order and issued nearly 4.4 lakh demand letters. Every higher pension payout places an additional liability of nearly ₹25 lakh on the pension fund. It’s a defined benefit scheme and the money comes out from the same pool. If I drain that corpus to provide higher pensions to a limited group today, what will happen when the current members retire? The sustainability of the fund is therefore critical. We have completed the exercise directed by the Supreme Court, and there is no proposal to reopen the window. EPS is intended to provide a basic pension to poorer sections in the formal sector. I can’t rob Peter to pay Paul. There is a misconception that the fund has unlimited resources. Your drawing higher pension out of this is going to deprive 10 or 20 people whose retirement depends on the same corpus.

Question from social media: How far is the EPFO justified in citing financial non-viability while extending pension on higher wages to employees of exempted establishments?

The Supreme Court’s judgment was limited in scope. It merely granted an additional four-month window to employees who were otherwise eligible but were not contributed. Eligibility was determined on that basis. Our circular of January 18, 2025, made it clear that the employer has an equal stake in determining whether contributions should be made on higher wages.

Question from social media: If an establishment is already contributing to the PF beyond the wage ceiling, will members have to submit a fresh digital declaration under the codes?

No. If an employer is already contributing to the PF on higher wages, that arrangement can continue. No separate declaration is required under the new scheme. The flexibility to reduce or increase contributions rests with the employer and the employee. It is a matter to be decided between them, without any additional consent, approval or declaration under the scheme.

Aroon Deep: Financial fraud targeting senior citizens has been on the rise. How is the EPFO addressing such fraud?

When a pension payment order is issued, we complete all due diligence to verify the pensioner’s identity. The bank account into which the pension is credited is also verified with the concerned bank. Unless there is collusion at the banking level, it is difficult for the money to be diverted to another account. In addition, pensioners need to submit a Digital Life Certificate every year through Jeevan Pramaan. We are also moving to an Aadhaar-enabled payment bridge system and have introduced a doorstep Jeevan Pramaan service through the Department of Posts.

T.C.A. Sharad Raghavan: Do you think PF coverage should be extended to gig and platform workers?

Of the total working population of India, which is estimated at 60 to 65 crore, the formal sector covers only 15 crore. The rest work in the informal sector and need the protection of a social security safety net. ILO (International Labour Organization) Convention 102 identifies nine branches of social security, including sickness, health care, children’s education and old age protection. The Social Security Code enables such benefits to be delivered through either Ayushman Bharat, ESIC (Employees’ State Insurance Corporation) and the EPFO. The government is working on the modalities of a scheme. The idea is to make it contributory or co-contributory.

Sreeparna Chakrabarty: INTUC (Indian National Trade Union Congress), the country’s second-largest trade union, has not been represented on the EPFO’s Central Board of Trustees for several years. What is the reason?

INTUC has had multiple factions, and that is probably the reason. As far as the EPFO board is concerned, nominations are made by the Ministry of Labour and Employment, which decides which trade unions are recognised and represented on the board.

Devesh K. Pandey: You spoke about KYC and automation. Do you mean that the problems members faced with errors in names, their father’s name and other personal details have now been taken care of?

The concept of a UAN came only in 2014 and Aadhaar was linked to it in 2017. Since last year, we have made the UAN generation or allotment based on Aadhaar facial authentication. We have given full power to the employees.

Though employees can withdraw up to 100% of the eligible balance in the PF including employee and employer share during their service, a new provision has been made that 25% of the contributions in an account should be maintained as minimum balance at all times. File.
| Photo Credit: Supreet Sapkal

Starting January 1, 2025, a slew of regulatory and financial changes will be coming into effect, affecting citizens across the country. From changes in the Employees’ Provident Fund Organisation (EPFO) procedures to adjustments in LPG pricing and the Unified Payments Interface (UPI), the new year could have a significant impact on your wallet. Here’s a complete list of the changes that you can expect.

EPFO new rule

EPFO is set to streamline the pension withdrawal process from January 1, 2025 as part of the centralised pension payment system (CPPS). Pensioners will now have the convenience of withdrawing their pensions from any bank in the country, eliminating the hassle of additional verification.

Reports suggest that EPFO will be soon issuing an ATM card that will enable subscribers to withdraw money around the clock. Moreover, the EPF contribution cap is expected to be eliminated this year as well.

GST

Multi-factor authentication (MFA) will be made mandatory for taxpayers for better security on the GST portal. Additionally, E-Way Bills (EWBs) can only be generated for base documents not older than 180 days.

UPI and farmer loans

As per a recent circular by the Reserve Bank of India (RBI), starting today, UPI 123Pay, using which feature phone users make online payments, will see an increase in its transaction limit from January 1, 2025. The new limit will be Rs 10,000, up from the previous Rs 5,000.

Additionally, the central bank has raised the cap on unsecured loans for farmers to Rs 2 lakh from Rs 1.60 lakh. This increase, effective today, is intended to provide more financial support to farmers, potentially aiding in better agricultural practices and investments.

Visa requirements

US Visa Appointment Reschedule:

Starting January 1, 2025, non-immigrant visa applicants in India will benefit from a policy allowing one free rescheduling of their visa appointment. However, any further rescheduling will necessitate a new application and payment of the visa fee, aiming to streamline the process while maintaining discipline in appointment scheduling.

Changes in the H-1B Visa Process:

New rules, effective from January 17, 2025, will modernise the H-1B visa process, making it more flexible for employers and accessible for Indian F-1 visa holders.

LPG pricing

Though no official announcement has been made so far, the trend has remained of price change of both domestic (14 kg) and commercial LPG cylinders (19 kg) in the new year. While domestic cylinders’ prices have remained consistent, commercial cylinders have witnessed some volatility. As per experts, there could be a price hike in both.

Employees Providend Fund Organisation building at Bandra. File
| Photo Credit: Supreet Sapkal

Retirement fund body EPFO has registered 13.41 lakh net new members addition in October 2024, according to showed latest payroll data.

This signifies increased employment opportunities and heightened awareness of employee benefits, bolstered by EPFO’s effective outreach initiatives, a labour ministry statement said on Wednesday.

According to the statement, the Employees’ Provident Fund Organisation (EPFO) has released provisional payroll data for October 2024, revealing a net addition of 13.41 lakh members.

As per the data, EPFO enrolled around 7.50 lakh new members in October 2024.

This addition in new memberships can be attributed to growing employment opportunities, increased awareness of employee benefits, and EPFO’s successful outreach programmes, the ministry stated.

A noticeable aspect of the data is the dominance of the 18-25 age group, constituting a significant 58.49 per cent of the total new members added in October 2024.

The net payroll data for the age group 18-25 for October 2024 is 5.43 lakhs.

This is in consonance with the earlier trend, which indicates that most individuals joining the organised workforce are youth, primarily first-time job seekers.

The payroll data highlights that approximately 12.90 lakh members exited and subsequently rejoined EPFO.

This figure depicts year-on-year growth of 16.23 per cent compared to October 2023.

These members switched their jobs and rejoined the establishments covered under the ambit of EPFO and opted to transfer their accumulations instead of applying for final settlement, thus, safeguarding long-term financial well-being and extending their social security protection.

Gender-wise analysis of payroll data unveils that out of the new members added during the month, around 2.09 lakhs are new female members.

This figure exhibits year-on-year growth of 2.12 per cent compared to October 2023.

Also, the net female member addition during the month stood at around 2.79 lakh.

The increase in female member additions is indicative of a broader shift towards a more inclusive and diverse workforce.

State-wise analysis of payroll data denotes that net member addition in the top five states/ UTs constitutes around 61.32 per cent of net member addition, adding a total of around 8.22 lakh net members during the month.

Of all the states, Maharashtra is leading by adding 22.18 per cent of net members during the month.

The states/UTs of Maharashtra, Karnataka, Tamil Nadu, Delhi, Haryana, Telangana and Gujarat individually added more than 5 per cent of the total net members during the month.

Month-on-month comparison of industry-wise data displays significant growth in the members working in establishments engaged in the industries — Road motor transport, Electronic media companies in the private sector, and banks other than nationalised banks, among others.

Of the total net membership, around 42.29 per cent addition is from expert services (consisting of manpower suppliers, normal contractors, security services, miscellaneous activities etc).

The payroll data is provisional since data generation is a continuous exercise, as updating employee records is a continuous process.

The previous data gets updated every month. From the month of April 2018, EPFO has been releasing payroll data covering the period from September 2017 onwards.

In monthly payroll data, the count of members joining EPFO for the first time through Aadhaar validated Universal Account Number (UAN), existing members exiting from coverage of EPFO and those who exited but rejoined as members, is taken to arrive at net monthly payroll.

EPFO building. File photo
| Photo Credit: Niranjan R. Varma

Retirement fund body Employees Provident Fund Organisation (EPFO) recorded a net addition of 19.94 lakh members in July this year, the Labour Ministry said on Monday (September 23, 2024).

Union Labour Minister Mansukh Mandaviya said in a press conference that 10.52 lakh new or first-time workers subscribed to Social Security schemes run by the EPFO.

The minister said almost 20 lakh net new members addition (19.94 lakh) were recorded in July this year. He also informed that 8.77 lakh members added in July are in the age group of 18-25 years.

Nearly 6.25 lakh members of ages between 18 and 25 are first-time workers or new joiners, according to the latest data. About 59.4% of new joiners fall within the 18-25 age bracket. He said that the data shows the employment of young people has increased.

He also informed that 4.41 lakh female members were added by EPFO in July which includes 3.05 lakh new joinees. The minister pointed out that female employment has also increased.

New Delhi:

The Employees’ Provident Fund Organisation (EPFO) has reported its highest-ever monthly payroll addition in July 2024, with 19.94 lakh members joining the ranks.

This highlights a shift in India’s employment landscape, reflecting the effectiveness of the Modi Government’s transformative schemes aimed at driving job creation and formalising the job market.

The EPFO data indicates that of the new additions, 10.52 lakh are first-time employees, marking a 2.66 per cent increase over June 2024 and a 2.43 per cent rise compared to July 2023.

This uptick in employment showcases an expanding job market and increased opportunities, particularly for youth and women.

India’s massive push toward economic growth and job creation has been bolstered by key government initiatives like the Production Linked Incentive (PLI) Scheme, the Startup India movement, the Employment Linked Incentive Scheme, and significant capital expenditure (Capex) drives.

Year-wise net payroll additions further underscore the progress being made: in 2022-23, there were 138.52 lakh net additions, while in 2023-24, this number was 131.48 lakh.

Youth employment is leading the surge in formal job creation, with 8.77 lakh young individuals contributing to the net payroll in July 2024 alone.

Among these, 6.25 lakh were first-time employees, accounting for 59.41 per cent of total new joinees in the month. This growth can be attributed to initiatives like the National Career Service (NCS), which currently hosts over 20 lakh active vacancies and has registered 33.72 lakh companies, indicating robust hiring across various sectors.

A key highlight of July 2024 is the rise in female workforce participation. The data shows that 4.41 lakh women joined the formal sector in July, with 3.05 lakh being new joinees.

The net female workforce grew by 14.41 per cent, while the number of new female members increased by 10.94 per cent. This substantial rise in female employment reflects the government’s focus on improving access to education, skill development programs, and support services like working women hostels.

Industry-wise, the top sectors driving the highest net payroll additions in July 2024 include manufacturing, marketing services, the usage of computers, and building and construction.

These industries collectively accounted for over 2 lakh new members, while other sectors such as expert services, electronic media companies, and banks also contributed to the rising employment numbers.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Watch: Budget 2024 | What is in store for labour?

In her seventh budget speech, Finance Minister Nirmala Sitharaman announced three new employee-linked incentive schemes in the Union Budget for 2024-25. The three schemes, which are part of the Prime Minister’s package, will align with enrolment in the Employee Provident Fund Organisation and focus on the recognition of first-time employees, as well as support to both employers and employees.

The schemes will facilitate employment, skilling and other opportunities for 4.1 crore youth over a five-year period with a central outlay of ₹ 2 lakh crore. The Centre will provide ‘Employment Linked Incentives’ to employers based on enrolment in the Employees Provident Fund Organisation. One of the major proposal among this is to provide internship opportunities in 500 top companies to one crore youth for 12 months.

Students will get an internship allowance of ₹ 5,000 per month along with a one-time assistance of ₹ 6,000. Companies will have to bear the training cost and 10 per cent of the internship cost from their CSR funds. Many have interpreted this as the next Agniveer scheme given the casual nature of this scheme. Trade unions also seem to be not happy with the budget as their long pending demand of restoration of Old Pension Scheme is ignored this time too.

The EPFO fixed a three-year high interest rate of 8.25% on employees’ provident fund for 2023-24 on February 10.

The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) has recommended an interest rate of 8.25% on provident fund (PF) deposits for 2023-24. The current interest rate is 8.15%.

“The move is a step towards fulfilling PM Modi’s guarantee of strengthening social security for India’s workforce,” said Union Labour Minister Bhupender Yadav after a meeting of the CBT here on Saturday. The meeting also authorised Mr. Yadav to constitute the new executive committee of the CBT.

Also read: The woes of pensioners and PF members 

The CBT has recommended to the Union Finance Ministry that the new interest of 8.25% could be applied to the accumulations in subscribers’ accounts for 2023-24. Once the Finance Ministry accepts the approval, the new rate will be officially notified in the government gazette. “Subsequently, the EPFO will credit the approved rate of interest to its subscribers’ accounts,” the Union Labour Ministry said in a press release.

“The CBT has recommended a distribution of historic income amount of ₹1,07,000 crore to EPF members’ accounts on a total principal amount of about ₹13 lakh crore, which were ₹91,151.66 crore and ₹ 11.02 lakh crore respectively in 2022-23. The total income recommended for distribution is the highest on record,” the Centre said, adding that the income had grown by more than 17.39% and principal amount had increased by 17.97%, which is a healthy financial performance.

The issue of non-inclusion of representatives of the INTUC and the AITUC in the CBT were also taken up during the meeting.

“The EPFO’s apex decision making body Central Board of Trustees (CBT) has decided to provide 8.25% rate of interest on EPF for 2023-24 at its meeting on Saturday,” a source said.

The 8.5% interest rate on EPF deposits for 2020-21 was decided by CBT in March 2021.

ESIC cover for retirees

A meeting of the Employees’ State Insurance Corporation (ESIC) was also held on Saturday. The meeting decided to extend the ESIC’s medical benefits to superannuated insured persons with relaxed norms. Superannuating workers, who were insured under the ESIC but who went out of the scheme coverage in view of exceeding the wage ceiling, will get the benefit if the worker was under insurable employment for at least five years before superannuation or voluntary retirement. “The persons who were in the insurable employment for at least five years after April 1, 2012, and superannuated/voluntarily retired on or after April 1, 2017 with wages up to ₹30,000 per month will be benefited under the new scheme,” the Ministry said.

The meeting also relaxed existing norms for establishment of dispensaries, medical infrastructure, Regional-Sub Regional offices in north-eastern States, including Sikkim. It also approved a new policy on AYUSH 2023 in ESIC institutions. “The policy details the establishing of panchkarma, Kshara Sutra and AYUSH units in ESIC hospitals,” it said. The ESIC will also acquire land for construction of 100-bed hospitals at Udupi in Karnataka, Idukki in Kerala, and for a 150-bed hospital at Malerkotla in Punjab.