Bengaluru violence forces rollback of PF restrictions
Feb 10 notification on new norms is cancelled
NEW DELHI: The government on Tuesday rolled back a contentious move to change provident fund withdrawal norms after protesting garment factory workers turned violent in Bengaluru, torching buses and attacking a police station in the country’s IT hub.
Union labour minister Bandaru Dattatreya announced the decision in Hyderabad, a day after the government deferred implementation of the new norms till August 1.
The rollback means that PF subscribers can continue to withdraw their entire retirement fund in case of unemployment for two months or more. The government had proposed to put a bar on the 100 percent withdrawal, leading to discontent among the five crore-odd PF subscribers.
The decision marks the government’s second u-turn on changes to the pension fund. In March, the government withdrew a plan to tax EPF withdrawals after an outcry from salaried workers.
Every month, salaried individuals contribute 12% of their pay to their provident accounts and the employer matches this.
The new norms, first announced in February, were to come into effect from May 1.
“The reason (for the rollback) is the request of trade unions. The earlier decision was also taken by the opinion of the trade unions. Now, when the trade unions are requesting, then we have rolled back the decision,” Dattatreya said.
Several labour unions including the RSS-affiliated Bharatiya Mazdoor Sangh have spoken against the proposal and protested in different parts of the country. In Bengaluru, thousands of garment factory workers launched an agitation on Monday, allegedly panicked by reports which said the new norms will bar PF withdrawals entirely. The protests turned ugly on Tuesday when workers run amok, torching at least 15 buses besides pelting stones on a police station.
In a notification issued in February, the labour ministry said 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.
Subscribers are now allowed to claim 90 per cent of their accumulations in their PF account at the age of 54 years and their claims are settled just a year before their retirement.
Dattatreya said he will seek approval of the rollback from the central board of trustee (CBT) 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.
Trade unions welcomed the government’s decision.
“If it’s workers’ money why should the government decide when it can be withdrawn? The government was unnecessarily creating confusion,” said AK Padmanabhan, president of the Centre of Indian Trade Unions.