The government approved proposal to raise the wage ceiling for mandatory coverage under the Employees’ Provident Fund Organisation (EPFO) from ₹ 15,000 to ₹ 25,000 per month on Wednesday. The move is expected to bring more than 51 lakh additional employees under mandatory EPFO coverage, expanding access to social security benefits, according to government release.
The EPFO wage ceiling had remained unchanged between 2004 and 2014 before being raised to ₹ 15,000 in September 2014. The latest increase to ₹ 25,000 takes into account sustained wage growth, rising incomes and the expansion of formal employment over the intervening years, according to the release.
The annual government outgo following the enhancement is estimated at about ₹ 11,339 crore, compared with the existing annual budgetary support of around ₹ 10,250 crore. The estimated expenditure over five years is about ₹ 56,696 crore, according to the release.
The government said that it expects the measure to support further formalisation of employment, improve long-term retirement security and widen access to portable statutory social security benefits. The latest revision reflects sustained wage growth, rising incomes and the expansion of formal employment over the intervening period, said the government.
