Government may reduce PF contribution to increase take-home salary

May 27, 2017 11:09

The labour ministry has proposed to reduce the employers contribution to the Employees Provident Fund from 12 per cent to 10 per cent.

The proposal, which will be opposed by trade unions, will come up for approval in the meeting of the Central Board of Trustees on Saturday.

Around 50 million employees in the country receive provident fund contributions.

The move, according to the labour ministry, will increase the take-home salary of employees. But trade unions opposing the move termed it an attack on social security.

According to the agenda paper of the meeting, the Employees Provident Fund Organisations CBT will consider a proposal to lower the rate of contribution to be paid by employer and equal contribution by employees from the present 12 per cent to 10 per cent by issue of appropriate order by the Central government.

The Employees Provident Fund and Miscellaneous Provisions Act, 1952, empowers the Central government to lower the contribution rate and the government intends to issue a notification to effect the change.

The ministry has also said that the main grounds on which it has requested the EPFO to place the proposal in the agenda are that there were demands from various quarters on many occasions to review the present rate of EPF contribution and placing it at par with other social security schemes, such as the National Pension System.

Arindam Majumder/Business Standard

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