The Parliamentary Standing Committee on Labour has asked the Union Labour Ministry and the Employees Provident Fund Organisation (EPFO) to provide a written statement within two weeks on its investments in various private stock schemes.
Members, cutting across party lines, questioned the EPFO’s decision to invest workers’ money in private equities.
At a meeting held here on Wednesday, the members asked the Centre and the EPFO to explain the logic behind the decision and sought the names of people in the authority who took such a policy decision. EPFO’s CEO Sunil Barthwal told that a good portion of the total amount of ₹13.7 lakh crore available with the EPFO was invested in various equities in 2018-19 and 2019-20. “A portion of this amount has been invested in various private schemes and in organisations such as IL&FS, which is facing a probe for financial irregularities. We asked them to explain the status of these investments,” said a member of the panel.
As almost all members raised similar questions, Chairman of the panel and senior BJD MP Bhartruhari Mahtab directed Barthwal to provide a written explanation of investments other than in government bonds. “Also, the EPFO has an unclaimed amount of ₹42,000 crore for years. MPs opined that this amount could be used to raise the minimum pension,” another member said.
The members also demanded information on the withdrawal from the EPFO during the pandemic situation and the status of the EPFO pension scheme. For most of the queries neither the Labour Ministry nor the EPFO could provide information and Mahtab asked the officials to give a written explanation for each of the issues raised by the MPs. “The committee generally suggested that the Provident Fund scheme should be extended to workers in the unorganised sector and also include scheme workers and self-employed persons,” a member said.
Maximum salary cap
Barthwal said the maximum salary cap applicable to the pension scheme should be changed from the present ₹15,000 per month and agreed that the minimum pension for retired workers is a very small amount. Members reminded him that though an expert committee appointed by the EPFO recommended raising the minimum monthly pension to ₹2,000 and the Labour Standing Committee then headed by Bhagat Singh Koshyari had also recommended a minimum pension of ₹3,000, the Centre did not implement them
Members also asked the Ministry and the EPFO to explain the impact of Social Security Code on the provident fund scheme. “Did the Centre hold discussions with the PF authorities before enacting the new code? Under the new code, the monthly contribution of employers and workers in PF has been reduced from 12 per cent of salary to 10 per cent. How will this affect the functioning of the fund? What is the role of the Board of Trustees (Tripartite) Committee constituted under the old Provident Fund Act?,” the member asked.