A senior government official cited strong economic growth and its impact on employment generation for the expected increase in contributions. “The robust jump in contributions to the EPFO is an indicator of increase in formal job creation and rising wages over the last few years,” he said. “However, there could be a marginal dip in numbers if inflation is taken into consideration,” he said. According to the official, the increase in contributions to the retirement fund body is in line with the government’s vision to widen the social security net and generate more formal employment in the country. The government budget for 2024-25 has projected the contributions to the EPFO-managed provident and pension funds and deposit-linked insurance scheme to be ₹2,99,676.21 crore, compared with the revised estimate of ₹2,78,089.03 crore for the current fiscal year ending March 31. In pre-pandemic FY20, these schemes had received ₹1,24,365.85 crore in total contributions, as per EPFO’s annual report.
As per the budget estimates, the EPFO estimates contributions under the Employees’ Provident Fund (EPF) scheme to be ₹2,30,751.49 crore. Contributions are expected to be ₹65,335.28 crore under the Employees’ Pension scheme (EPS) and ₹3,589.43 crore under the Employees’ Deposit Linked Insurance (EDLI). Net new enrolments under the EPFO have seen a steady increase since 2020-21 with 7.70 million formal workers added to the social security organisation that year, 12.2 million in 2021-22 and 13.8 million in 2022-23. It added 10.0 million subscribers this fiscal year till November 2023. Higher contributions will also lead to an increase in investments by the EPFO, which will likely fetch greater returns to its over 65 million members. The retirement fund body has paid high interest rates year after year even as the interest rates on other small saving schemes have seen a dip. For 2023-24, the EPFO has declared the interest rate at 8.25%, the highest in three years and compared with 8.15% in 2022-23 and 8.10% in 2021-22.
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