 "Labour ministry in dark over optional EPF in textile made-ups sector")
The government may seek post facto approval for making provident fund optional for the textile made-ups sector by seeking to amend the Employee’s Provident Fund Act, 1952.
“The Union Cabinet has given its approval to reforms to boost employment generation and exports in the made-ups sector (a sub-sector of textiles and apparel)... making employees’ contribution to EPF optional for employees earning less than Rs 15,000 per month,” a cabinet statement said.
According to the EPF Act, employees earning up to Rs 15,000 have to contribute 12% of their basic pay towards provident fund. The employer must match the employee's minimum contribution of 12% of basic pay.
Labour ministry officials said they were clueless about the government’s decision to extend the move to the made-ups sector. “I was not aware about it, but the government has to seek necessary approval from Parliament,” a ministry official said.
The government in June had decided to change labour laws in the textiles sector. Besides making provident fund contributions optional for employees earning less than Rs 15,000 per month, it allowed fixed-term employment, making it easier for employers to hire contract workers.
A textile ministry official said many other items would be added to the category of the made-ups sector.
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“This goes against the principle of making India a pensioned society, about which the government is always talking about. We will strongly oppose such a move,” said Virjesh Upadhay, general secretary, Bharatiya Mazdoor Sangh, the trade union affiliated to the ruling Bharatiya Janata Party.
“The objective of this move seems to diverge from the idea of a pensioned society. It is also against government attempts to bring the sector into the formal economy,” said Subramanyan Sreenivasaiah, chief executive officer of Ascent HR, a consulting firm.
In February, severe differences arose between the finance and labour ministries when the EPF rate of interest was reduced to 8.75% from the 8.8% suggested by the labour ministry.
“The labour ministry should be kept in the loop. After all, it is the decision of the government as a whole,” Upadhay said.