Centre is looking to increase the wage ceiling of Employee Pension Scheme (EPS) from the current level of ₹15,000 per month, official sources said.
Talks and deliberations on this issue are happening at an advanced stage right now. The government is also planning to increase the wage ceilings for mandatory inclusion of workers under the Employees’ Provident Fund (EPF) and the Employees’ State Insurance Corporation (ESIC) schemes, they added.
At present, the wage ceiling for EPF and EPS is ₹15,000 per month. This was revised from ₹6,500 in 2014. Earlier this year, the Union Labour Ministry had sent a proposal to Finance Ministry for increasing the EPF and EPS wage ceiling to ₹ 21,000 per month.
EPFO manages both provident fund and pension scheme (EPS 95).
To be eligible for pension under EPFO, one must have completed at least ten years as a EPS member. Payout towards pension starts at the age of 58.
IT modernisation
Meanwhile, the Employee Provident Fund Organisation (EPFO) will in embark on the next leg of IT modernisation in the coming months, to improve its overall functioning and also simplify processes and procedures for EPF subscribers.
“We are currently implementing version 2.01 of our IT modernisation programme. (Centralised IT Enabled System (CITES 2.01). We will next move to version 3.0 of this project,” sources said. As part of CITES 2.01, the EPFO board had approved proposal for a centralised pension payment system (CPPS). Under this, EPS pensioners will get pension from any bank, any branch, anywhere in India from January 1, 2025.
There is no proposal to convert EPFO into a bank or reposition it as a bank, but there is a conscious effort to upgrade the IT hardware and software in the retirement body so that the IT system becomes more robust, they added.
“We definitely want to provide all kinds of features that Banks generally provide these days to customers in a technology channel,” sources in EPFO said.
The idea is to have improved features like a modern bank where subscribers get notified on their smartphones/phones about say receipt or withdrawal of PF contributions, interest etc. “Whenever you go to an ATM, there is a message you get on your phone the moment you withdraw cash. We are looking for such kind of services for our PF subscribers,” sources said.
ELI Scheme
The Union Labour Ministry is preparing a Cabinet note on the Employment Linked Incentive (ELI) scheme and would be taken up very soon, sources said. This scheme was announced in this year’s budget 2024-25 with an objective of employment generation, promoting employability and formalisation of labour. The total budgetary outlay provided was ₹1.07 lakh crore.
The Part A of the Scheme incentivises first time eligible employees of an establishment in the formal sector and will reimburse one month wage up to ₹15,000 in three instalments.
The Part B of the Scheme will incentivise additional employment in the manufacturing sector, with respect to their EPFO contribution in the first 4 years of employment.
The Part C of the Scheme will incentivise employers up to ₹3,000 per month for each additional employee for 2 years.
While Part A of the scheme aims to benefit more than 2.10 crore new employees; Part B is expected to benefit 30 lakh employees in the manufacturing sector. Part C will facilitate employers to create nearly 50 lakh jobs for first-time and re-joinees.