Politics · India Bureau
India raises EPFO wage ceiling to Rs 25,000 after 12-year gap
The Union Cabinet has approved a significant expansion of mandatory employee provident fund coverage, raising the wage threshold to Rs 25,000 monthly from Rs 15,000. The move is expected to extend social security protection to more than 51 lakh additional workers.
LSN India ·
India's mandatory employee pension scheme will now cover workers earning up to Rs 25,000 per month, the Cabinet decided on Wednesday, marking the first upward revision of the wage ceiling in over a decade. The increase from the existing Rs 15,000 threshold represents a substantial expansion of the Employees' Provident Fund Organisation's (EPFO) reach across the country's formal employment sector.
The revision, which comes 12 years after the previous hike to Rs 15,000 in September 2014, is designed to accommodate wage growth and broader formalisation of the Indian economy. Officials stated the decision reflects sustained increases in worker incomes and the continued expansion of formal sector employment across the nation.
The expansion will bring an estimated 51 lakh additional employees within mandatory EPFO coverage, significantly broadening social security protection for India's workforce. This represents one of the largest extensions of the provident fund scheme in recent years, potentially benefiting millions of workers in the formal and semi-formal sectors.
The government estimates the annual budgetary outgo for the enhanced coverage at approximately Rs 11,339 crore, against the existing annual budgetary support of about Rs 10,25 crore, representing a modest increase in fiscal commitment to worker welfare. The decision underscores the government's focus on expanding social security coverage as the economy continues its formalisation trajectory.