Social Security Code Bill
Moots to Cut Short the Savings of Workers in EPFO
According to reports in the
media that the social security code
bill-2019 to be introduced in the
parliament, which has received the
cabinet approval, is giving an
option to employees to reduce their
contribution to employee’s provident
fund. The government claims that
it is taking this step ‘to put more
money in employee’s hands so that
they spend more and provide a fillip
to consumption. Some so-called
experts opine that younger
employees who have low income
and significant debt may view it as
welcome move”. Thus a favourable
public opinion is being constructed
to cover up the actual intentions
implied in such a move.
The government which has
been sturdily withdrawing from its
responsibility of providinga
guaranteed social security to the
workers as has been dictated by
neoliberal economic policies,
seems to be withdrawing from its
responsibility by gradually diluting
the already existing social security
scheme – EPF – guaranteed by the
government.
EPF is the only mandatory
retirement vehicle available to
employees now. Through this
employees are able to save from
the wages and build a reasonable
retirement corpus. Now a member
of EPF contributes 12% of the basic
wages to EPF and matching
contribution of 12% from the
employers. Of this 8.33% of the
employer’s share goes towards
employees pension scheme and
the government further makes a
contribution of 1.6% of the wage to
the pension account of workers.
However, the savings through
EPF are not very high in the private
sector where the salary has many
components and basic salary is
often low. Now to opt to reducing
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the contribution to EPF would be
leading to the reduction of savings
and less retirement corpus, harming
even the marginal security saved
by the employee. On the other hand
such an option would be benefiting
employer by reducing the burden of
share of their matching contribution
to the portion of the member opted
for reduction of his own contribution
to the EPF.
Lack of more money in the
hands of an employee and reduction
of his purchasing power is the
consequence of lesser wages, high
inflationary rate, ever increasing
prices of essential commodities and
anti-people economic policies
pursued by the government to
benefit big capital. Fall of
consumption is the consequence of
economic recession.
Any sane attempt to increase
the purchasing power of workers
and increase their consumption shall
be done by increasing the wages,
controlling the inflation and
reducing the prices of the essential
commodities and consumer goods
by the reduction of indirect taxes
etc. But the government chose to
reduce the savings of the workers
for after retirement security and
increase availability of money in the
hands of worker.
With such a move the
government chose to not only
benefit the employers by lessening
their burden of contribution to EPF,
but also favour the market forces
by making available the means for
market consumption and thus
bailing out the consumer goods
selling business corporations from
the adverse effects of economic
recession, suffering with lack of
more sales of their goods to earn
more super profits. The proposed
social security code is chosen to
perform this evil task by peddling
false claims showing them as
benefiting to already insecure
workers.
There are around 40 million
workers who are active contributors
with the EPF’s employees pension
scheme account. There is 13.3 trillion
corpus fund to EPFO. Besides this
new move it is revealed that already
the central government has reneged
the EPFO to a tune of Rs.4,900 crore
by not remitting its share of pension
contribution of 1.16% from the very
inception of the Scheme during
1995-96. Added to this the central
government has not remitted to
EPFO in lieu of the amount (provided
as a grant-in-aid of Rs.800 crore
every year to fund the deficit in
terms of minimum monthly pension
of Rs.1000/- to all subscribers of
EPS effective from September 2014.
Thus in a systematic way the
government is moving the EPF
social security to be dissolved
gradually lessening the burden of
employers as well by withdrawing
from its responsibility to be guarantee
to the EPF savings of workers
besides matching every effort to
expose the EPFO corpus to the
speculative markets.
Already the government forced
the EPFO to invest 15% of its corpus
in the speculative market with the
ruse of providing the EPFO
members to gain higher return on
their savings. It is forcing EPFO to
further invest in speculative market
by taking the risks at the cost of
worker’s savings.
A recent bitter experience of
workers of Uttar Pradesh Power
Corporation Limited (UPPCL)
exposes the dubious promises of
the government luring them to opt
to investment in stocks of speculative
market to gain ‘higher return’ on
their EPF savings.
contd. on page 4
Class Struggle