Labour minister Sharad Yadav announced today that he was planning to make radical changes in the social security systems covering workers.
At his first meeting of the Central Board of Trustees (CBT) which presides over the Employees' Provident Fund, Yadav said he was considering making it voluntary for workers to join just one -- either the EPF or the pension -- social security scheme. Currently, under the existing EPF Act, membership of both the PF and pension schemes is mandatory. This costs workers an average of 25.70 per cent of their monthly wage. He said he would consider leaving the membership of the scheme they would like to join up to the workers. This could apply to workers' cooperatives, home-based workers, construction workers, self-employed workers, tendu leaf pickers, etc. This proposal was made in the past but the finance ministry had ruled it out.
Yadav also told the CBT that he would increase the coverage of the PF and pension schemes.
Currently, a schedule lists 180 notified classes of industry to which social security can be extended. Industry, trade and occupations that do not fall within these notified 180 heads are excluded from social security although these might include concerns that employ more than 20 workers.
Yadav said that the EPF organisation covered less than 30 million workers in India, while the working class population of the country was estimated at 400 million. The remaining 365 million workers had no social security cover or old age income support. This had to be changed.
The EPF Board also recommended reduction of the threshold level of employees entitled to social security coverage. A series of other measures of the EPF and MP Acts to improve regulatory and operational efficiency of the EPF organisation were proposed to reduce dispute and litigation, improve compliance and record-keeping and support the setting up of e-governance and e-services to its clients.
The board accepted the 4th actuarial valuation of the Employees' Pension Fund and gave 4 per cent relief to all pensioners despite the reduction in earnings from interest in the last 18 months after the government reduced interest rates. This move will benefit over 10 lakh pensioners immediately.
