Financial Daily from THE HINDU group of publications
Monday, Mar 15, 2004
Industry & Economy - Small Savings
PF arrears soar to Rs 1,377 cr PSUs are drag on recovery
New Delhi , March 14
PROVIDENT fund dues stood at Rs 1,377.87 crore at the end of the last quarter despite all-out efforts by the Employees' Provident Fund Organisation (EPFO) to recover the arrears from employers across the country. This may put the EPFO under pressure to cut the interest rate on PF deposits from the existing 9.5 per cent in the new fiscal beginning April.
The Central Board of Trustees (CBT) of the EPFO, which is to decide on the issue, is worried over the rate of recovery from many chronic defaulters.
Said one of the members: "In case a private party defaults, the EPFO can adopt various routes of recovery once the individual promoters of the company are identified. But in the case of public sector undertakings (PSUs), recovery of the PF outstandings becomes a very tricky issue. Incidentally, some of the PSUs are among the largest defaulters."
As of now, West Bengal tops the list of high defaulting States with units located in the State accounting for Rs 286.99-crore dues. Maharashtra is next with Rs 217.04-crore dues followed by Uttar Pradesh.
However, Uttar Pradesh would have been second, only if the State had not been bifurcated to carve out Uttaranchal, which is in the 12 position with dues amounting to Rs 41.26 crore.
Tamil Nadu and Andhra Pradesh occupy the fourth and fifth positions with Rs 93.20 crore and Rs 91.34 crore as dues, respectively.
According to the CBT member, many of the defaulter units in the high defaulting States have actually stopped operations and only exist on paper, making recovery impossible for all practical purposes.
Also, in some cases, the Board for Industrial and Financial Reconstruction (BIFR) has recommended winding up of the units.
"So we will have to take a decision based on ground realities only," he said.
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