By B. Sivaraman
The Central Statistics Office (CSO) said on 24 August 2018 that the Employees Provident Fund Organization (EPFO) added 1,07,54,348 new members from September 2017 to June 2018.But then the CSO also added that in the same period, 60,40,616 members ceased subscribing to EPF. The pro-government commentators seized upon the figure of increase to argue that employment generation is better under the NDA regime than it was under the UPA.
In fact, being privy to the trend data of NSSO, none other than Prime Minister Narendra Modi himself said as far back as in January 2018 that “lies were being spread” by the Opposition about the lack of employment in India. “In one year, EPF (Employment Provident Fund) accounts of 70 lakh youth between the ages of 18 and 25 have been opened,” Modi said in an interview to a TV channel on 22 January 2018. “Seven million new EPF accounts, doesn’t this show new employment?” This sparked a major debate as to whether EPF data can be taken as indicative of new employment generation as EPF primarily recruits those who are already working. But none of those who disputed Modi’s claim questioned the accuracy of his figure of employment generation in the 18–25 age-group, which was 54 lakhs only and not 70 lakhs, even according to the CSO figures, as can be seen below in the table.
EPF Subscribers
Total during September 2017–June 2018
Age
Number of New EPF Subscribers during the Period
Number of Members who Ceased Subscribing during the Period
Less than 18 84,963 12,000
18–21 26,02,816 7,49,652
22–25 28,14,692 14,64,194
26–28 13,71,266 9,69,775
29–35 19,17,046 13,90,678
More than 35 19,63,565 14,54,317
Total 1,07,54,348 60,40,616
Source: CSO
Anyway, considering the overall increase to the tune of 11 million in all age brackets, this can be overlooked as a minor technical glitch in an interview.
But what explains the sudden sharp increase? None who participated in the debate seemed to be aware that EPFO expanded its coverage of EPF to workers earning a monthly salary of Rs.15,000 from October 2014from those drawing up to Rs. 6500 as earlier. Naturally, after a time-lag of a couple of years this would show a sharp increase as the extent of coverage had been doubled.
Moreover, the new GST regime has forced conversion of a sizeable segment of the earlier “informal” economy into formal and this is bound to reflect as a sharp leap in EPF membership. But this is also existing employment and not newly created ones.
But this otherwise vibrant debate limited itself to the question of whether EPF figures can be the proxy for new employment generation or not. Unfortunately, nobody bothered to go deeper into the other facet indicated by the CSO data, viz., the cancellation of 60.4 lakh EPF subscriptions. Even more disturbing is that no one bothered to raise the fact that the overall social security cover for Indian workers, especially the overall coverage of organized sector workers under EPF, remains dismal at below the 50% mark, covering only 11 million of the organized sector workers, numbering26 million as per the 2014–15 NSSO survey.
Despite EPF being a statutory benefit to be provided to all the employees earning less than Rs. 15,000 per month, including contract workers, it being mandatory under the law for all enterprises having 20 workers and more, the evasion by enterprises is widespread. Though EPF has been extended only to the construction workers in the unorganized sector, in reality this is hardly observed. One crore and 15,000 companies all over the country have registered under the GST but at present only 10 lakh companies have registered under the Employees Provident Fund Organisation and many among them are defunct. The Labour Minister even reported in parliament that the income limit for eligibility for EPF would be increased to Rs.21,000 from Rs. 15,000 and the coverage would be extended to cover all the enterprises with 10 workers and above, similar to ESC coverage; in April this year the government dropped both these proposals without much protest from the Opposition, including from the Left. Likewise, Minister of State for Labour told a business paper that Modi is keen on extending EPF to cover all the 40 crore unorganized sector workers but in December 2017 the Labour Secretary ruled out extension of ESI and PF to unorganized workers.
Earlier the idea was that cost of social security—like premiums for insurance—for the informal workers would primarily be borne by the government and a part would also be collected from the employers where possible. But the Modi government’s new credo is that workers should pay from their own pockets to buy social security for themselves. This is the principle on which the Draft Labour Code and Security and Welfare, released in March 2017,is based and it proposes that social security funds would be constituted in each state based on contributions from workers, and these funds would be used to provide assorted benefits to workers such as pension, provident fund, group insurance and even sickness and maternity benefits. This means the Centre is proposing to dump social security on the states.
Despite having the National Pension Scheme linked to the EPF, instead of extending it to all the unorganized workers (even though this contributory pension scheme also doesn’t return to the workers the entire money deducted from them), what is the point in coming up with a tokenist Atal Pension Yojana for unorganized workers, run entirely from their own contribution? And now comes the announcement that Ayushman Bharat health insurance scheme would automatically be extended to all EPFO members. Then what is the fate of ESI? Is the Modi government planning to hand over workers’ healthcare to private sector and wind up ESIC? The only saving grace is that, with hardly two parliamentary sessions left, the Opposition would not let the government pass such anti-worker legislations, especially in the Rajya Sabha. Still, the workers need to be vigilant. (IPA Service)
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