Govt rolls back restrictions on PF withdrawals after violent protests

Mangalore Today/ HT

New Delhi, April 19: The government on Tuesday rolled back new norms on provident fund withdrawals after violent protests in Bengaluru by garment factory workers who set ablaze 15 buses and attacked a police station in the country’s IT hub.

“We have decided to cancel the February notification (tightening PF withdrawal norms)…the old system will continue,” Union labour minister Bandaru Dattatreya said here this evening, a day after the government decided to defer its implementation till August 1.

Discontent has brewed ever since the government announced its decision in February to put curbs on withdrawal from the retirement fund, a major source of instant money for the five crore-odd PF subscribers.

 

The new norms restricting 100 percent PF withdrawal by members out of job for more than two months were to come into effect from May 1. Every month, salaried individuals contribute 12% of their pay to the EPF account and the employer matches this.

Several labour unions including the RSS-affiliated Bharatiya Mazdoor Sangh have been demanding complete rollback of the decision.

In Bengaluru, thousands of garment factory workers launched protests on Monday against the government’s proposal, allegedly panicked by reports which said the new norms bar PF withdrawals completely.

In its notification issued in February, the labour ministry restricted 100 per cent withdrawal by members unemployed for two months or more. Instead, individuals will be able to withdraw only their contribution to the fund and the interest earned on it, and not the employer’s contribution.

The rules also barred subscribers from claiming PF before turning 57.

 

 

 

As per the earlier norms, subscribers were allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 years and their claims were settled just a year before their retirement.

Under the proposed norms, subscribers could withdraw the full amount in case of emergency situations including housing, major medical treatment, education of children in medical, dental and engineering courses, and weddings.

Sources said the government’s rollback decision will be ratified at a meeting next month of the central board of trustee of the Employees Provident Fund Organisation (EPFO), the government body which manages the funds.

The CBT is the highest decision-making body of the EPFO and includes representatives from the industry, trade unions and government.