Centre’s decision on PF withdrawals put off till July 31

New Delhi, April 19 (IANS) Under attack from political opponents and pressure from trade unions, including from the RSS’s Bharatiya Mazdoor Sangh (BMS), the government on Tuesday went on the backfoot and deferred till July 31 its decision to bar provident fund withdrawals for housing, medical treatment and marriages of children.

Labour Minister Bandaru Dattatreya said the final decision on allowing withdrawal of the employer’s contribution to the provident fund corpus until the employee attains the age of 58 years will be taken only after July 31.

"The notification that bars withdrawal of PF will be kept in abeyance for three months till July 31, 2016," he told reporters here.

A labour ministry official said that the government’s decision to revisit the earlier decision that imposed restrictions on withdrawal of the PF was taken after receiving various representations from trade unions.

The BMS on Tuesday said it will continue to protest till all restrictions on PF withdrawal are removed.

The government went on the defensive and put off the PF withdrawal decision till July 31 after garment workers in Bengaluru demanding removal of curbs on PF withdrawals went on rampage and set on fire over a dozen vehicles in the vicinity of a police station which they attacked.

A meeting of the Employees Provident Fund Organisation’s Central Board of Trustees would be called to examine all issues related to employers’ contribution towards EPF, said sources, adding that the views of the law ministry would also be sought.

In February, the labour ministry issued a notification restricting 100 percent withdrawal of provident fund by members unemployed for more than two months. The earlier decision was then deferred till April 30 but as protests persisted, the government has decided to postpone it yet again.

The EPFO had also restricted withdrawal of PF to the employee’s own contribution and interest earned on that, if the claimant has remained unemployed for more than two months.

According to the new norms proposed earlier this year, subscribers are not to be allowed to claim withdrawal of PF after attaining 54 years of age, and would have to wait till age of 57.

The earlier norms allowed contributors or subscribers to claim 90 percent of their accumulations in their PF account at the age of 54 years, and the final claims to be settled just one year before their retirement.

Workers of a garment factory in Bengaluru on Tuesday took to the streets and blocked traffic on the busy Mysuru-Bengaluru highway and set many vehicles ablaze to protest stricter amendments to the provident fund withdrawal rules, police and eyewitnesses said.

Some 20 people were arrested and police fired warning shots as stone-pelting protestors attacked the Hebbagodi police station, a police officer said.

Trade union leaders said they are of the view that the curbs on withdrawal are unnecessary as the quantum involved is just 3.67 percent of the employer’s contribution.

"It is an unwanted and unnecessary decision. All the trade union representatives on the board of trustees had opposed the move. Even a couple of employer’s representatives were in agreement with our views," Centre of Indian Trade Union (CITU) president and CBT member A.K. Padmanabhan told IANS.

According to him, it is a confusion created by the bureaucracy and there is no rationale for restricting the withdrawal.

"It is after all the employees’ money. Now, it seems there will be one more notification," added Padmanabhan, alleging that the reduction in PF interest rate, and the budget proposals on taxing the PF corpus at the time of withdrawal are all part of the government’s plan to push the people’s savings towards the share market.