Another telltale sign of the havoc left behind by COVID-19 is perhaps the reply of Labor Minister Santosh Gangwar to the Parliament. In his reply, the Labor Minister revealed that the Employees’ Provident Fund Organization had shut down as many as 71,01,929 accounts in the period between April and December 2020. The figures for the same period a year ago stood at 66,66,563.
The Government had imposed lockdown conditions on March 25, 2020 and the drastic increase in closed accounts is a testament of the hard-hitting pandemic.
EPF accounts are usually closed due to a variety of reasons like superannuation, loss of employment or a change in employment. The increase in closure of the accounts can be contributed to the loss of income of salaried employees.
The Minister also mentioned in his reply that the total partial withdrawals from the accounts saw an increase. Compared to 2019, 2020 saw a doubling of the figure over the same time frame.
Total withdrawals also underwent a change – rising from Rs. 55,125 crore to Rs. 73,498 crore in 2020.
Incidentally in March 2020, the Finance Minister Nirmala Sitharaman had proposed significant tax reliefs on EPF withdrawals. Under it, an EPF member would have been eligible to draw up to three months’ basic and dearness allowance.
The Labor Minister further announced that under the Aatmanirbhar Bharat Rozgar Yojana (ABRY) programme, at least 1.83 lakh businesses have been registered. This means that 15.30 lakh employees will be covered under the scheme.
The ABRY was initially launched to encourage the re-hiring and creation of new jobs following the COVID-19 pandemic.
It is currently being implemented through the EPFO and is a major factor in reducing the financial burden faced by employers.
Under this plan, the Government will take up the cost of both the employees’ and employers’ share of contributions. As of 28 February, 2021, almost Rs. 186.34 crore has been released under ABRY.
The upcoming months are crucial in India’s path to recovery. What remains to be seen is if the economy responds favorably to the revival efforts.