EPF withdrawal soared to ₹39,400 cr during lockdown: govt2 min read . Updated: 15 Sep 2020, 08:20 AM IST
10.4 mn salaried workers dipped into retirement savings between 25 March and 31 August, said the labour ministry
Salaried employees withdrew a massive ₹39,400 crore from Employees’ Provident Fund (EPF) accounts between 25 March and 31 August as covid-19 impacted lives and livelihood of millions of workers, the Union labour ministry informed the Lok Sabha on Monday.
Of the total 10.4 million salaried workers who dipped into their retirement savings in this period, at least 8.2 million are those who earn a salary of less than ₹15,000 per month each, reflective of the hardship the bottom of the pyramid faced during the lockdown imposed to check the spread of covid-19 and the ensuing income and job loss.
Since the beginning of the lockdown on 25 March till end of August, ₹39,403 crore had been withdrawn, the labour ministry said. Of this, more than 40% is from the three industrial states of Maharashtra, Tamil Nadu and Karnataka, it said. EPF subscribers in Maharashtra withdrew ₹7,837.85 crore, while in Karnataka the figure was ₹5,743.96 crore and in Tamil Nadu, including Puducherry, the amount of withdrawal was ₹4,984.51 crore. Delhi and Telangana are the other two states where the withdrawal by EPF subscribers was collectively more than ₹5,500 crore.
The withdrawal of more than ₹39,400 core is almost 30% of the Employees’ Provident Fund Organization’s (EPFO) annual accruals and may have a long-term impact on the financial health of the retirement fund body.
The labour ministry did not give any details about reasons for the withdrawals but EPFO data showed that a majority of the withdrawal numbers are related to covid-19 advances. EPFO had earlier this month said that 55% of advance claims settled during April-August 2020 were related to the recently introduced covid-19 advance, while 31% of advances settled during the period pertained to illness claims.
“With EPFO settling advance claims within three days, PF accumulations are now seen as liquid assets that can timely meet the need of the subscribers during crisis. Consequently, members have shown greater trust in EPFO by not opting for final withdrawal or closure of account, instead choosing to apply for PF advances to meet their financial needs," the EPFO had said earlier this month.
According to Centre for Monitoring Indian Economy, salaried jobs were down from 86 million in FY20 to 65 million in August, underlining the 21 million job losses that the country faced due to the pandemic.
In response to a separate question on the number of migrant deaths during lockdown, the Union labour ministry said there is no such data is available, but added that the central government had issued comprehensive advisory guidelines on 27 July to all the states and Union territories for the welfare of workers returning to their destination states against the backdrop of covid-19.