Govt shelves plan to hike basic salary threshold to increase EPFO coverage
To ease burden on exchequer
by Natasha Nadkar
The ministry of labour & employment has shelved a proposal approved by the central board of Employees Provident Fund Organisation (EPFO) to increase the basic salary threshold to Rs.21,000 from Rs.15,000 per month. The plan aimed to bring six million more organised sector employees under mandatory EPF coverage and provide them PF and pension benefits. The government decided to shelve the plan because it will lead to additional expense of up to Rs.30 billion per year. Currently, the government pays 1.16 per cent of the basic wages to each EPFO subscriber earning less than Rs.15,000 a month towards employees’ pensions.
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