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The retirement fund physique introduced its determination in a proper assembly with its officers every week in the past, an EPFO official, who attended the assembly, informed ET on the situation of anonymity.
“Whereas a notification on this regard is but to be issued, efforts are being made to disable the availability of non-refundable Covid advance within the software program, in order that subscribers can not apply for it,” the official added.
Consultants say the transfer is anticipated to impression consumption as a lot of the Covid advance was getting used for discretionary purchases and different bills. Additionally they mentioned the choice has come too late and that it had impacted the supply of funds at EPFO’s disposal.
“The ability of money withdrawal from retirement financial savings has fuelled consumption however persevering with the window for thus lengthy was not proper. It has impacted provide of funds for EPFO, which might have been in any other case invested, not directly affecting returns on EPFO investments for its subscribers,” labour economist KR Shyam Sundar mentioned. A commerce union chief, talking on the situation of anonymity, mentioned this can be a clear reflection of laxity on the a part of the forms.
“It took them so lengthy to finish the Covid withdrawal regardless of understanding that almost all of this withdrawal from one’s retirement financial savings was getting used for functions apart from medical,” he mentioned, including that the burden on these beneficiaries have shifted to the longer term with lowered financial savings.
Over 22 million-or greater than one-third-of EPFO’s complete subscribers had availed of the Covid advance within the three fiscal years ranging from 2020-21, amounting to ₹48,075.75 crore, as per the EPFO’s draft annual report for 2022-23.
In response to the report, the retirement fund physique disbursed ₹17,106.17 crore in 2020-21, benefiting 6.92 million beneficiaries, ₹19,126.29 crore in 2021-22 to 9.16 million beneficiaries, and ₹11,843.23 crore to six.20 million beneficiaries in 2022-23. The supply for Covid advance, which got here into impact on March 28, 2020, noticed 33 beneficiaries availing the power within the 4 days until the tip of FY20 (March 31, 2020), amounting to ₹0.06 crore.
EPFO has over 60 million subscribers and manages a corpus of greater than ₹ 20 lakh crore.
The federal government had in March 2020 notified amendments to the EPF Scheme, 1952 to offer for non-refundable advance to EPF members not exceeding the essential wages and dearness allowances for 3 months, or as much as 75% of the quantity standing to a member’s credit score within the EPF account, whichever was much less, within the occasion of outbreak of an epidemic or a pandemic. This made all staff working in institutions and factories throughout India, who have been members of the EPF Scheme, eligible for the non-refundable advance underneath the amended scheme, which got here into impact on March 28, 2020.
