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Protest forces Centre to defer new PF rules

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  20 April 2016 12:00 AM GMT

Garment workers in Bengaluru go on rampage, several vehicles torched

NEW DELHI/HYDERABAD, April 19: Under attack from political opponents and pressure from trade unions, including from RSS-affiliated Bharatiya Mazdoor Sangh (BMS), the government on Tuesday said it has decided to withhold till July 31, its decision on new provident fund (PF) rules.

Labour Minister Bandaru Dattatreya said the fil decision on withdrawal of 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 in New Delhi.

Later, addressing a press conference in Hyderabad, Dattatreya said the notification will not be implemented from May 1 as announced earlier and he would hold talks with all stakeholders and call a meeting of Central Board of Trustees (CBT), which will take a fil decision.

The minister, who is CBT chairman, assured that they will take a decision for the betterment of employees and to make the system foolproof.

He said as a result of this decision, the earlier scheme for withdrawal of PF will continue till July 31. Employees’ Provident Fund Organisation (EPFO) subscribers can file for full and fil settlement.

Dattatreya clarified that the notification restricted withdrawal of only 3.67 percent of the employer’s share out of his total contribution of 12 percent, until after retirement, but during an earlier review it was also decided to allow an employee to withdraw even this amount for four purposes - treatment, purchase of house, marriage and education of children.

He said the decision to keep the move in abeyance was taken following representations received from trade unions and workers.

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

The government decision came in wake of protests by garment workers in Bengaluru to press for removal of such curbs. Workers of a garment factory took to the streets and blocked traffic on the busy Mysuru-Bengaluru highway and set many vehicles ablaze on Tuesday to protest amendments to the provident fund rules, police and eyetwinesses said.

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

On the Bengaluru violence, Dattatreya said the protestors were migrant workers, who work for two to three years at one place and then migrate. “That is why they are demanding they should be allowed to take their money,” he said.

Claiming that the rendra Modi government is pro-worker, he said there was lot of misinformation going on in the country and it had taken many key decisions like enhancing the pension, bonus and insurance coverage.

Meanwhile, trade union leaders said that 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 in 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 AK Padmabhan told IANS.

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

“It is after all the employees’ money. Now it seems there will be one more notification,” added Padmabhan, 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.

In his Union Budget this year, Fince Minister Arun Jaitley had announced that 60 per cent of the amount in provident fund would be taxed when the account was emptied out or when the worker cashed in what he had saved. After countrywide protests, that plan was cancelled.

Now, the government’s plan to restrict a worker’s withdrawal to his or her contribution and the interest on it, till the age of 58, has got the labour unions up in arms. As for contribution made by the employer to the provident fund, the government has stipulated that to claim or withdraw the employer’s contribution, the worker must wait till he turns 58 years (the age limit was earlier 54).

Pointing out that workers in some sectors are unsure of being employed after they turn 50, many labour unions have argued that making workers wait till they are 58 to collect what employers have contributed for them does not make sense.

In February, the labour ministry had issued a notification restricting 100 percent withdrawal of provident fund by members unemployed for more than two months. The government had notified the plan in the gazette on February 10, but had to put the notification on hold till April 30. Now the notification has been deferred again to July 31.

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 57. 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 fil claims to be settled just one year before their retirement. (IANS)

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