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The provident fund is one of the earliest social safety organisation for workers of the organised sector in the country and was set up in March 1952
The private sector of the country has been increasingly defaulting on deposits with the Employees’ Provident Fund Organisation (EPFO) with defaults rising by about 10% over the past five years, sending the amount in cumulative arrears past the Rs 15,000 crore in FY23. The provident fund is one of the earliest social safety organisation for workers of the organised sector in the country and was set up in March 1952.
The EPFO report said that default on PF dues by private sector entities stood at Rs 5,581.5 crore in 2018-19, Rs 7,146.18 crore in 2019-20, Rs 7,857.79 crore in 2020-21, and Rs 10,479.31 crore in 2021-22.
The Economic Times has quoted the EPFO’s draft annual report for FY23 to show how the private sector has increasingly accounted for PF arrears in the country. In the past five years, the share of the private sector in total arrears stands thus: 74.2% in 2018-19, 77.6% in 2019-20, 79.8% in 2020-21, 82.2% in 2021-22 and 83.17% in 2022-23.
Therefore, the total rise of the private sector in this inglorious share since 2018-19 has gone up by 8.97 percentage points. The three years FY21, FY22 and FY23 that were under the shadow of the pandemic recorded a rise of 5.57 percentage points. In terms of absolute figures, the arrears to be recovered by the EPFO which was Rs 78,922 crore in FY19 rose to Rs 28,762.76 crore in FY23. In FY20, the arrears stood at Rs 10,509.60 crore, at Rs 11,152.5 crore in FY21 and Rs 14,202.4 crore in FY22.
The FY23 EPFO report has pegged dues under the head of pension at Rs 4,289.05 crore. Other dues were as follows: Rs 566.48 crore on account of EPF administration and inspection charges and Rs 322.51 crore towards insurance and Rs 12.39 crore for the deposit-linked insurance scheme stood at. Thus, the total default amount to 13,953.18 crore.
Another item – penalty on damages and interest delay – to the tune of Rs 4,567.74 crore and default of Rs 1,300.88 crore from exempted establishments took the cumulative arrears to Rs 15,254.06 crore, said the annual report of the EPFO.
Of the 13,953.18 crore dues from defaulting establishments, private sector companies accounted for Rs 11,605.21 crore while the public sector was responsible for Rs 1,913.29 crore. The default by co-operatives was at Rs 434.68 crore.
The EPFO operates three schemes. These are the Employees’ Provident Fund Scheme 1962, the Employees’ Pension Scheme 1995, and Employees’ Deposit-Linked Insurance Scheme 1976.