Around one-third of companies registered with the Employees Provident Fund Organisation (EPFO) have not submitted their statutory provident fund (PF) dues for April.
The firms have highlighted an extensive decline in their finances as revenues drained overnight due to the coronavirus-induced lockdown.
The latest data from EPFO shows that only 321,800 firms paid PF dues for April to their employees. The number is 178,000 fewer than the companies that paid the said dues in the previous month (March, 2020). A total of 4,99,895 companies paid PF dues for March, 2020. In February, 520,566 companies paid PF dues.
A total of 654,421 establishments registered with EPFO submitted PF deductions directly to the retirement fund body in the past year. In addition, there are 2,557 exempt firms that handle their own retirement fund corpus with guidance from EPFO.
Muralidharan Thyagarajan, chairman of TMI Group, a Hyderabad-based staffing company told Mint that although the government has allowed the companies some exemptions due to the lockdown, such a high number of them not submitting dues "shows that their revenues are in bad shape."
Following massive withdrawals by employees from the retirement fund, and payment defaults since the nationwide lockdown began on March 25, the situation has only gotten worse due to the coronavirus outbreak and the subsequent lockdown.
A source told the news daily that despite EPFO's announcement that it won't penalise those who don't submit PF dues on time, 178,000 fewer companies contributed to the same - both theirs and their employees' share. This indicates that the damage has been done to the formal sector.
The source further stated that the months of May and June will possibly affect the formal sector and jobs creation all the more.