50% Indian Employees Forced To Withdraw Money From PF A/c Due To This Reason
The pandemic and the lockdown that has been imposed since last year has led to people resorting to withdrawing money from their provident funds to manage their expenses.
In fact, more than 50% of the employees in India have had to dip into their provident fund retirement savings since the start of the pandemic and the lockdown 2020.
More Than 50% Indian Employees Forced To Dip Into Provident Fund
A report has revealed to us that out of the 35 million or 3.5 crore provident fund subscribers who withdrew money from their PF accounts, 7.2 million or 72 lakh people have availed of the non-refundable Covid advance that was offered to them last year. This made up to Rs 18,500 crore between April 1, 2020, and May 1, 2021.
In total, there are about 60 million or 6 crore Employee Provident Fund (EPF) subscribers.
The above mentioned 35 million formal sector workers together withdrew an amount of Rs. 1.25 lakh crores from their EPF accounts during the year. This amount also includes the settlement against the provident fund, pension, death insurance and transfers.
As per the report, in the financial year 2018-2019 (FY19), a total of 16.37 million or 1.63 crore claims have been settled by the Employee Provident Fund Organisation (EPFO). This has made up for a total amount of Rs 81,200 crore. There is no data available for 2020.
Highest Number Of Claims From Mumbai, Pune, Delhi, Bengaluru
The report also states that withdrawals or claims have increased by 10% year-on-year due to retirement and this number is on the higher side because of Covid withdrawals. In simple words, this means that a lot of employees lost their jobs and also had to resort to dipping into their retirement funds.
As per the report, a maximum number of claims were filed in major cities like Mumbai, Pune, Delhi and Bengaluru; these were the cities that also witnessed a high number of COVID cases last year as well.
Last year, Finance Minister Nirmala Sitharaman announced in a press conference that several steps have been taken to offer relief to the salaried employees. As per the new changes, the government will be paying the employees’ contribution of 12 per cent plus 12 per cent of the employer’s contribution in the employees’ provident fund. They will be paying this for 3 months.
There also was news about the members of the retirement fund body, Employees’ Provident Fund Organisation (EPFO), have availed as much as Rs 39,402.9 crore. This amount was withdrawn between March 25 2020 and August 31 2020 alone, i.e. 180 days alone.