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In line with the official, the choices being thought-about embrace linking it to the patron value index or dearness allowance or the median wage. “An professional committee is prone to be set as much as recommend probably the most applicable index for the aim. Then the labour ministry will maintain consultations with all related stakeholders earlier than a agency proposal is moved,” stated the official, who didn’t want to be recognized.
Wage ceiling underneath the EPFO has been revised solely eight occasions because the inception of the scheme in 1952. It stood at ₹300 in 1952, ₹500 in 1957, ₹1,000 in 1962, ₹1,600 in 1976, ₹2,500 in 1985, ₹3,500 in 1990, ₹5,000 in 1994, ₹6,500 in 2001 and ₹15,000 since 2014 onwards.
Whereas this is able to improve the EPFO protection, it could imply an extra price to the employers and the federal government and therefore the proposal might face stiff resistance. Apart from, there could be a rise within the administrative price for operating the schemes underneath the EPFO.
It is because an employer makes an identical contribution of 12% of the employees’ fundamental wage in direction of provident fund whereas the federal government contributes 1.16% to the Workers’ Pension Scheme for each employee, with the wage ceiling fastened at ₹15,000. Of the employers’ share of 12%, 8.33% goes into the pension account of the beneficiary.
