#Lockdown: 6.5 Lakh Indians Withdraw Rs 2700 Cr From Provident Funds Due To Economic Crisis

The Covid-19 pandemic has brought with it not just a sense of panic but also a gray area of unemployment, massive job losses and an unanticipated fall in the economic graph around the globe.

The people who worked and depended on daily wages as a means of their livelihood have been affected the most due to the lockdown, as an attempt to contain the spread of this deadly virus.

We have covered innumerable stories encompassing the effects of coronavirus lockdown on every sector of the country. This has led to various consequences.

For instance, a large set of people are fleeing to the banks and ATMs to withdraw money. We have covered this whole scenario as well.

Today, a similar picture paints itself. It has been found that ever since the lockdown has started and has persisted, over 650,000 people have withdrawn their employee provident fund (EPF) savings to compensate for the income loss caused due to the lockdown.

Govt’s New Rule

About some time back, the Union Govt had allowed the Employee Provident Fund Organisation (EPFO) subscribers to withdraw up to 75% of their PF savings, or three months of basic wages and dearness allowance, whichever is lower, under a new rule, especially drafted and promoted to deal with hardships faced during this crisis.

The working class and service sector has been affected the worse. Construction, road transport, logistics, IT, manufacturing, all have lost businesses. The income loss is huge and is spread wide across the country.

Over 650,000 People have dug into EPF

The financial conditions of families have gotten so bad that over 650,000 individuals have dug into their EPF savings to counteract the effects of poor income during this lockdown period.

On any average working day in April, about 30,000-35,000 people are withdrawing their provident fund savings, which is a clear indication of the hardship the working class.

Around ?2,700 crore has already been withdrawn under the newly-facilitated pandemic rules. This includes the money withdrawn from the retirement fund corpus directly under EPFO as well as the corpus managed by company PF trusts.

Also to be noted is the fact that not just workers from small firms but the ones from blue-chip companies too fall under this umbrella.

• The employees of Neyveli Lignite Corp. in Cuddalore have withdraw  Rs 84.4 crore of PF money.
• The employees of Visakhapatnam Steel Plant in Vizag have recorded a withdrwal of Rs 40.9 crore, and
• Those from NTPC Ltd have bagged Rs 28 crore from their PFs.

Obviously, when businesses have suffered a massive setback, people are also bound to have lost income. 

However, this count recorded of the people withdrawing their PF money in such huge amounts wasn’t expected.

The retirement fund manager Employees’ Provident Fund Organisation has estimated that in the next 10 days, at least a million subscribers may withdraw money from PF accounts.