A huge number of common people dug into their savings meant for retiral life in the Employees’ Provident Fund Organisation (EPFO) to keep their heads above water during the pandemic, data from the draft annual report for 2020-21 has showed. The Economic Times has reported that about 2.2 crore subscribers which works out to almost one-third the total EPFO subscribers, withdrew non-refundable funds from their kitty via a special window during the Covid-19 scourge.
The EPFO’s draft annual report has stated that the amount of money withdrawn from the kitty in three financial years from 2020-21 to 2022-23 worked out to Rs 48,075.75 crore.
The first case of Covid 19 in India was detected on January 27, 2020. In 2020-21, the first full year of the pandemic playing out, EPFO distributed Rs 17,106.17 crore in 2020-21 to 69.2 lakh subscribers. In the next year (2021-22), the non-refundable special window withdrawal went up to Rs 19,126.29 crore by 91.6 lakh beneficiaries. The next year (2022-23) the withdrawal came down to Rs 11,843.23 crore. It helped 62 lakh subscribers.
EPFO claims a total subscriber base of 6 crore. It has a total kitty of about Rs 18 lakh crore. To provide succour to the subscribers, the government amended the EPF Scheme, 1952 to allow for non-refundable withdrawal from this social safety net. The amount that could be withdrawn from the EPFO was calculated thus – money equal to basic wages and dearness allowance for three months or 75% of the amount in a member’s EPF account, whichever was less. The claims helped the subscribers partially mitigate the financial stress arising out of the pandemic and the crippling financial effect it had on households either through outright job losses or reduction of income. The facility was thrown open from March 28, 2020. The special service was extended to a second round in March 2021. Data showed that the number of subscribers who withdrew money month wise under the special Covid 19 window in FY23 was: April 7.04 lakh, May 6.44 lakh, June 5.50 lakh, July 5.10 lakh, August 5.37 lakh, September 5.16 lakh, October 4.34 lakh, November 4.09 lakh, December 5.08 lakh, January 4.75 lakh, February 3.85 lakh, March 5.24 lakh. The EPFO is run by a central body of trustees. It operates under the Union labour ministry and is the decision-making body of the retirement savings corpus.
Job creation in September
On the other hand, the EPFO recorded a small incremental rise in job creation in September 2023 to 17.2 lakh compared to 16.9 lakh in August. Incidentally, in September 2022, the number of new jobs created by the body was 16.8 lakh. Around 8.9 lakh new members enrolled under EPFO in September 2023. Of these first-time enrollers, 58.9% belonged to the age-group of 18-25 years.
“This demonstrates that the majority of the members joining the organised sector workforce of the country are youth who are mostly first-time job seekers,” the labour and employment ministry said.
The number of EPFO subscribers who went out of the payrolls and entered again amounted to about 11.9 lakh.
The number of exits from the EPFO rolls went down by 12.17% year on year with 3.6 lakh exits in September 2023. Incidentally, the number of members exiting EPFO has been on a downhill since June this year. A subscriber exits the EPFO payroll data on retirement, termination of employment and/or death (before retirement).
Of the 8.9 lakh new members who joined EPFO payroll for the first time in September, about 2.3 lakh or almost 26% were women.
A state-wise scan of payroll data shows that the number of net additions during September was the highest in Maharashtra, which is a traditional leader in most age brackets. It was followed by Tamil Nadu, Karnataka, Gujarat and Haryana.
Download Money9 App for the latest updates on Personal Finance.