The government’s reported move to reject its own proposal to reduce the threshold limit provident fund (PF) coverage from 20 workers to 10 employed in a factory has evoked a mixed reaction.

While trade unions have flayed the government for going back on its promise to ensure social security for workers, the Indian Staffing Federation (ISF) has welcomed the move, saying this will further promote ‘ease of doing business’.

The proposal to reduce the threshold limit was approved in the 183rd meeting of the retirement fund body EPFO’s tripartite decision-making body, the Central Board of Trustees (CBT), headed by the Labour Minister.

Following this, the Labour Ministry had also proposed bringing in an executive order to widen PF coverage. However, as per sources, the Labour Ministry is now rethinking the proposal.

Reacting to reports, AK Padmanabhan, a CBT member and President of Centre of Indian Trade Unions, accused the NDA government of “going back on its own assurance given in Parliament to reduce the existing threshold of 20 worker to 10”.

The government had said that 50 lakh more workers would benefit by this move, which proposed to cover lakhs of factories with at least 10 workers, instead it is preferring to serve the interests of employers, not workers, Padmanabhan said in a statement.

Earlier, All India Trade Union Congress had also decried the move to rethink, saying it would be a major setback to 50 lakh workers who would have benefited. However, Rituparna Chakraborty, President, ISF, an umbrella of flexi-staffing organisations, welcomed the move, saying it would further promote “ease of doing business”. Reducing the threshold limit for PF coverage to 10 workers employed in a factory “would have prompted more informalisation, as small companies would have preferred to stay small to avoid this hassle,” she said, adding that “in the case of lowering of the threshold, small enterprises, which are struggling to establish themselves, would have had to bear not just the cost of PF but also the cost of administering such a huge responsibility, something they would not want to do at that stage.”

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