Universal PF Scheme for Unorganised Sector, Self-Employed Workers
UPSC / SSC current affairs note · Economy
Why in news
EPFO is developing a universal provident fund scheme to cover millions of unorganised sector workers, self-employed individuals, gig workers, and those in exempted establishments. This initiative aims to extend retirement savings beyond the current EPFO network, aligning with the new social security code.
Background
Currently, EPFO covers only establishments with over 20 workers, leaving a large portion of the workforce without formal retirement savings. The government has been working on implementing new labour codes, including provisions for social security for all workers.
Key facts
EPFO is developing a universal provident fund scheme for unorganised sector, self-employed, gig workers, and exempted establishments.
Subscribers can contribute daily or annually, with corpus earning annual interest and tax benefits.
Annual contribution up to Rs 2.5 lakh is fully exempt from tax, and interest on it is also tax-free.
Withdrawal phase allows subscribers to retain corpus with EPFO even after retirement, with a systematic withdrawal plan option.
The scheme is self-financing, with no budgetary support, unlike PM Shram Yogi Maandhan Yojana where Centre contributes 50%.
EPFO has studied models like Singapore's to design the framework.
Labour ministry is seeking to ensure retirement savings beyond the present EPFO net.
Under new labour codes, platforms like taxi aggregators or delivery apps must register their workers on a portal.
The scheme is in initial discussion phase; EPFO has floated a tender for IT architecture.
Prelims pointers
- EPFO: Employees' Provident Fund Organisation
- PM Shram Yogi Maandhan Yojana: Central scheme with 50% government contribution for pension
- New labour codes: Include social security provisions for all workers
- Universal provident fund scheme: Self-financing, no budgetary support
- Tax exemption: Up to Rs 2.5 lakh annual contribution exempt, interest also exempt
Mains angles
- Discuss the significance of extending social security to unorganised sector workers in India.
- Critically examine the self-financing model of the proposed universal PF scheme vis-à-vis existing schemes like PM Shram Yogi Maandhan.
- Analyse the role of EPFO in implementing the new labour codes and ensuring universal social security.