Let workers decide on provident fund: Economic Survey
New Delhi, Jan 31 (IANS) The Economic Survey 2016-17 tabled in parliament on Tuesday by Finance Minister Arun Jaitley has called for giving greater choice to workers to decide if they want to make their share of contribution towards Employees’ Provident Fund (EPF).
Advocating reforms relating to labour, the report said low wage employees (people with less than Rs 20,000 salary per month) only receive 55 per cent of their salary because 45 per cent goes to statutory deductions like EPF, Employee Pension Scheme (EPS), Labour Welfare Fund (LWF), Employee State Insurance (ESI) etc.
It said low wage employees may prefer receiving these contributions today than benefit from them tomorrow.
“Given the difficulty of reforming labour laws per se, the thrust could be to move towards affording greater choice to workers which would foster competition amongst service providers,” the report said.
“Choices would relate to whether they want to make their own contribution to the EPFO; whether the employers’ contribution should go to the EPFO or the National Pension Scheme; and whether to contribute to the Employee State Insurance (ESI) or an alternative medical insurance programme,” it added.
The report recommended a gradual move to ensure that compliance with the central labour laws is made “paperless, presenceless and cashless”.