In a major relief to employee and employers, Finance Minister Nirmala Sitharaman on Wednesday announced that the government will continue to contribute towards Employees' Provident Fund (EPF) for selected businesses for another three months. This will be for the month of June, July and August.
The central government will provide liquidity support of Rs 2,500 crore to both businesses and workers for the next three months, said FM Sitharaman while addressing media.
"To ease financial stress as businesses get back to work, the government has decided to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crore," she said.
The FM also announced reduction in statutory Provident Fund (PF) contribution by employers and employees from 12 to 10 per cent. In a bid to offer more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for 3 months, amounting to liquidity support of Rs 6,750 crore, said FM.
In the wake of coronavirus outbreak, the FM had announced in March that the government will take care of EPF contribution of both the employer and the employee for the next three months. This scheme was applicable for organisation with up to 100 employees, where 90 per cent of employees draw less than Rs 15,000 salary.
The government has also amended the provident fund scheme regulations to allow workers under EPFO to draw up to 75 per cent of their non-refundable advance or 3 months of wages, whichever is lower. This scheme will benefit 4.8 crore workers registered with EPFO.
Till April 27, EPFO has settled a total of 12.91 lakh claims, including 7.40 lakh COVID-19 claims under Pradhan Mantri Garib Kalyan Yojana (PMGKY) package. This involves disbursal of a total amount of Rs 4,684.52 crore which includes Rs 2,367.65 crore COVID claims under PMGKY package.