At present the contribution to the Employees Provident Fund is limited to 12% of the basic salary. Along with the contribution of the employee an equal amount is to be remitted by the employer. The Employees organisations have been demanding that the contribution to EPF should be calculated on the basis of the pay and allowances together so that there will more savings in the EPF.
The Employees Provident Fund Organisation (EPFO) also agreed to the same and recommended to the government for including the allowances for calculating the contribution. It had issued a circular stating that “All such allowances which are ordinarily, necessarily and uniformly paid to the employees are to be treated as the basic wages.”
But the Government refused to approve the recommendation. It has directed the EPFO not to count the allowances along with the basic pay for the calculation of contribution to Provident Fund. The justified benefit getting to the EPF subscribers have been denied by the government.
It is clear that the government has taken this measure on the pressure of the private corporates to avoid employer’s higher contribution to the EPF. It is well known that the UPA government was always in support of employers and against the interests of the workers.
It is also to be pointed out that the Government has so far not implemented its decision to increase the minimum pension to Rs.1,000 and maximum to Rs. 15,000 which was one of the demands of the Central trade Unions and which was accepted.
Even in the last moment when the General Elections are to start in a few days, the UPA government wants to favour the corporates instead of the workers.