New Delhi: The government is all set to bring unorganised sector workers under EPFO (Employees Provident Fund Organisation) cover.The step is being taken to provide social security to workers in the unorganised sector.
According to a report in The Sunday Express, The government is making great efforts to get NPS (National Pension System), which dominates this segment on par with EPF, at least with respect to a favourable tax status.
“We are looking to improve our delivery… Once we achieve that, we will look to offer our services to workers in the unorganised sector,” said V P Joy, Central Provident Fund Commissioner.
He further added, the government has already improved EPF products “reasonably” and would focus on improving the delivery of its services.
On contrary to EPF, the NPS is a voluntary retirement savings scheme in which the savings of the individuals are individual savings are combined in the form of pension fund, which is invested by Pension Fund Regulatory and Development Authority.
A number of companies are providing NPS to their employees. Unlike all current pension plans, including that of EPFO, NPS provides easy portability across jobs and across locations.
In Budget 2016-17, Finance Minister Arun Jaitley had proposed imposing a tax on 60 per cent of the withdrawal amount from EPF in order to bring greater parity in the tax treatment of different types of pension plans. But that proposal was called off after a series of protests from trade unions and workers.
While the government’s budget proposals were aimed at having a uniform tax treatment for pension plans, Joy dismissed the possibility of growing competition with NPS.
“Let there be choice. Let people choose between whatever systems are operating for the benefit of the public. So let those systems run and as far as we are concerned, we have to worry about our products… what is good or bad for our workers, our clientele. If we are bad, we will improve so that people come to us,” Joy said.
