By Dr. Gyan Pathak
Centre is seriously working for Employees Provident Fund Organisation (EPFO) reform, which includes modernization of its database, centralization and other initiatives announced in the Union Budget 2024-25 to boost quality employment in the country through increased membership of EPFO.
The reform agenda was recently discussed in the 109th meeting of the Executive Committee of the Central Board of EPFO on November 8. It was decided that Executive Committee would meet monthly for the next few months to regularly monitor and review the reform agenda.
On November 15, during the Foundation Day celebrations Union Minister of Labour and Employment Dr Mansukh Mandaviya stressed the importance of robust IT platform, efficient system for grievance management and the implementation of member centric model of service delivery. While encouraging to increase pension coverage with a focus on enhancing last mile delivery of services, he stressed than continuous skill enhancement and capacity-building efforts within the organisation are paramount to adapting to evolving challenges and improving service delivery.
Ms. Sumita Dawra, Secretary (Labour & Employment) stressed the need of the officers and staff of EPFO to work for implementation, outreach and monitoring of Employment Linked Incentive (ELI) Scheme in the best possible manner, announced in the Budget 2024-2025.
It is worth recalling that the Union Budget 2024-25 had claimed that the ELI would generate 8 million jobs over the next three years. Budget allocation for this scheme was Rs10,000 crore. It was claimed that 10 million youths would be skilled over the next five years. The ELI scheme is linked to EPFO with its three schemes – Scheme A, Scheme B, and Scheme C – providing financial support to employers for first time EPFO members.
Scheme A provides a one-month salary, up to Rs. 15,000, in three instalments to first-time employees in the formal sector. This scheme is expected to benefit 2.1 crore youth. Scheme B focuses on job creation in manufacturing and incentivizes employees and employers for hiring first-time employees. This scheme is expected to benefit 30 lakh youth. Scheme C reimburses employers up to Rs. 3,000 per month for two years for each additional employee with a salary up to Rs. 1 lakh per month. This scheme is expected to benefit 50 lakh individuals.
However, there was little progress in this regard even when only a little over 4 months are left in the fiscal year 2024-25 to end. It is despite the fact that EPFO had conducted a country-wide consultation with all its Zonal and Regional Offices on September 25 on the ELI scheme. Zonal and Regional offices of EPFO were given direction by the Union Ministry of Labour and Employment to hold extensive consultations with various stakeholder bodies, associations and with EPFO’s existing employees for their suggestion and feedback on the various aspects of the scheme. At that time, it was said that scheme finalisation was in advanced stage. Nevertheless, the progress of implementation of the scheme has remained dismal so far.
EPFO is struggling with this scheme and its smooth implementation. The organisation has been struggling for several other problems too. In his foundation day welcome speech of the Central Provident Fund Commissioner (CPFC) is worth noting in this regard since he emphasized on the collective efforts required to fulfil EPFO’s vision for social security and economic empowerment for all its members. Reforms like IT database centralisation and modified electronic challan cum return will provide a technological boost to EPFO, he added.
The Union Ministry of Labour and Employment, in its pre-Foundation Day press release has said that India’s economy is currently undergoing a transformative shift marked by an increasing trend toward formalization—a process that is redefining job structures, employment security, and social benefits for millions. This change is of profound importance for India’s workforce, as it ensures that a larger segment of the population is covered by social security systems, offering them greater economic stability and a more secure future. The EPFO stands as a vital institution in this journey, it said.
According to the data provided by EPFO, from September 2017 to July 2024, over 6.91 crore members have joined EPFO. This means that nearly 7 crore people have transitioned to more secure, formal jobs. Indeed, it is a very slow progress, given that above 90 per cent of the workforce in India are in informal jobs.
The challenge has another dimension too. Net addition to EPFO in 2022-23 was 138.51 lakh only which even declined to 131.48 lakh in 2023-24, the data shows. Formalisation of jobs remained a challenge, and perhaps this is one of the reasons of announcing the ELI scheme in Union Budget 2024-25. Another reason, it has been alleged that the Centre devised this scheme only to benefit the employers in the form of financial support for their new employees joining EPFO.
EPFO Central Board’s Executive Committee meeting on November 8 discussed several aspects of EPFO’s functioning, the reform agenda, and some legislations which would again to be discussed in the meeting of Central Board of Trustees of EPFO on November 23. (IPA Service)
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