EPF Contributions Reduced By 10% For Next 3 Months, Says FM; Take Home Salaries To Increase

Finance Minister announced 15 measures, 6 of which deal with MSMEs, 2 relating to EPF, 2 relating to NBFCs, housing finance corporations and MFIs, 1 on discoms, 1 on contractors, 1 on real estate, and 3 on tax measures.

Representative Image/ Getty)

New Delhi: Finance Minister Nirmala Sitharam on Wednesday unveiled several initiatives and measures taken by the Central government under special economic package 'Atmanirbhar Bharat Abhiyan' worth Rs 20 lakh crore. Finance Minister announced 15 measures, 6 of which deal with MSMEs, 2 relating to EPF, 2 relating to NBFCs, housing finance corporations and MFIs, 1 on discoms, 1 on contractors, 1 on real estate, and 3 on tax measures. Speaking on measures taken for EPF establishments, Sitharaman said that a liquidity relief of Rs 2,500 crore EPF support is being given to all EPF establishments. As announcement by the Finance Minister, government of India will pay 24 per cent of the monthly wages into EPF accounts below Rs 15,000 per month, who are employed in establishments having up to one hundred employees, with 90 per cent or more of such employees earning monthly wages less than Rs 15,000.

7️⃣ A liquidity relief of ₹2,500 crore EPF support is being given to all EPF establishments, EPF contribution will be paid by Govt. of India for another 3 months, this will benefit more than 72 lakh employees

- FM #NirmalaSitharaman #AtmaNirbharBharatAbhiyan pic.twitter.com/k0zoZJ84ri — PIB in Maharashtra ???????? #MaskYourself ???? (@PIBMumbai) May 13, 2020

The Finance Ministry also pointed out that the scheme, which will be available till August, is committed to benefit more than 72 lakh employees and nearly 3.6 lakh employers. The move help salaried individuals with an increase in their take-home salary and will give relief to employers in payment of provident fund (PF). Sitharaman, while addressing a press conference, said that for next three months EPF or employee provident fund contribution will be 10 per cent each for employees and employers as compared to the statutory obligation of 12 per cent. Announced on March 26, the EPF contribution scheme under Pradhan Mantri Garib Kalyan Yojana (PMGKY) was launched with the intention to help the economically weaker sections cope with the COVID-19 pandemic. In another measure, Sitharam announced that the Central government has decided to slash the rate of mandatory PF contribution for both employees and employers by two per cent from 12 per cent to 10 per cent. She said that initiative is aimed to provide more liquidity to employers and employees and is likely to provide additional liquidity of Rs 6,750 crore

In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for Businesses & Workers for 3 months, amounting to a liquidity support of Rs 6750 crores. #AatmaNirbharBharatAbhiyan pic.twitter.com/VSysfvk4KU

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Nirmala Sitharaman's detailed speech listing out initiatives for EPF establishments came a day after Prime Minister Narendra Modi on Tuesday evening announced a special economic package worth Rs 20 lakh crore to mitigate the economic damage caused by the novel Coronavirus. The package, which is almost 10 per cent of India's GDP, includes Reserve Bank of India (RBI)'s assistance and a Rs 1.74 lakh crore fund announced earlier.  The package emphasizes on land, labour, liquidity, laws and will also focus on the farmers and the labourers who support the nation during the times of crisis.