Bowing to incessant protest and demands by workers across the country, the government on Tuesday announced a complete and unconditional roll-back of a February notification which restricted withdrawal of provident fund till retirement. The move came just hours after Labour Minister Bandaru Dattatreya said the new norms would be relaxed till July 31, the Hindu reported.
All changes, relaxations and implementation dates effected until now to appease the agitating employees will stand void.
"We are cancelling the February 10 notification [restricting complete withdrawal of PF savings] and the old system will continue. This was a demand of the workers and I have announced the roll-back in their interest," Dattatreya said.
Earlier this week, widespread protests over demanding the roll-back of new provident fund withdrawal norms in Bengaluru turned into rioting and caused huge loss to government vehicles and properties. Union Labour Secretary Shankar Agarwal, after assessing the situation in consultation with the PF Department, recommended a complete roll-back.
The minister, vouching to get the roll-back decision ratified soon by the trustees of Employee Provident Fund Organisation (EPFO), explained in a statement that the intention behind the proposed changes was noble and aimed at ensuring employees did not waste their retirement savings early in life and spend their retired life in despair, added the Hindu report.
"It was noticed that over 80 percent of the claims settled by EPFO belonged to pre-mature withdrawal of funds, treating the EPF accounts as savings accounts, and not a social security instrument," said the statement.
The daily reported that any enterprise with more than 20 employees is bound by the EPF rules to maintain provident fund account for each employee. The account is credited with 12 percent of employee salary and an equal contribution by the employer.