ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

India Is Far from 'Pensioned Society'

The government's misguided moves on Employees' Provident Fund rules show whose side it is on.

Recent developments reaffirm the Narendra Modi government’s scant regard for the interests of the working class as well as the salaried sections of the country’s middle classes. The government acts in haste and backtracks after protests. On the last day of February, Finance Minister Arun Jaitley announced in his budget speech a proposal to tax withdrawals from Employees’ Provident Fund (EPF) schemes that are in excess of 40% of the accumulated corpus in such funds. Immediately after this announcement was made, there was a big hue and cry not just from the opposition but also from within the ruling Bharatiya Janata Party, its ideological parent, the Rashtriya Swayamsevak Sangh and its trade union wing, the Bharatiya Mazdoor Sangh (BMS).

It was pointed out that while the proposal to tax would yield relatively little revenue, it would antagonise a substantial section of the population considered to be politically influential, including government employees at the centre and the states. On the defensive, Jaitley argued that the rationale behind the proposal was not to raise revenues but to achieve the larger policy objective of creating a “pensioned society” by discouraging full withdrawal of savings in the form of EPF. The Prime Minister then intervened and eight days after the budget speech was made, the finance minister sheepishly stated in Parliament: “In view of the representations received, the government would like to do a comprehensive review of this proposal and therefore, I withdraw this proposal.”

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top