One year of lockdown: Here’s why more than 71 lakh citizens closed their EPFO accounts

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The coronavirus-induced lockdown cripple the economy and rendered many jobless. The lockdown restrictions forced many companies to shut operations for some time and on resumption, they found the going tough. As a s result, they were forced to implement pay cuts and also conduct retrenchment exercises.

Unable to cope with the sudden dip in income levels, many were forced to dip into their savings.

More than 71 lakh people affected

Between April 2020 and December 2020, over 71 lakh subscribers closed their PF accounts. At the same time, in 2019, this figure was around 66 lakh. These include accounts which have been completely closed. However, new accounts were also linked in the EPFO ​​in the same sequence. In October, over 11 lakh subscribers closed their EPF accounts, the highest.

More than 1 crore account holders withdrew money

If we look at the data released by the Employees Provident Fund Organization (EPFO), it shows that the savings of the people were also affected. Between April-December 2020, the number of partial withdrawals from the Provident Fund account also increased. A total of 1 crore 27 lakh 72 thousand 120 people withdrew their accounts. By 2019, this figure was only 54,42,884. Between April and December 2020, Rs 73, 498 crore was withdrawn from EPF accounts, while in 2019, Rs 55,125 crore was withdrawn from EPF accounts in the same period.

COVID-19 impact  

While the impact of the corona virus epidemic had an impact on the entire economy, however, the biggest impact was seen on job workers. In the industry, many companies were cut in cost cutting, work from home culture, and due to the shutdown of the industry, people also lost their jobs. A lot of people also took voluntary retirement.

The three major reasons behind closure of EPF accounts during the lockdown were  superannuation (retirement), job loss and closure of accounts due to job changes.