Budget 2015: Senior Citizen Welfare Fund may face trade union, legal hurdles
FM had announced setting up of the fund using the unclaimed deposits of about Rs 3,000 crore in the PPF and about Rs 6,000 crore in the EPF corpus.
In the budget for 2015-16, the minister had announced setting up of the fund using the unclaimed deposits of about Rs 3,000 crore in the PPF (public provident fund) and about Rs 6,000 crore in the EPF (employees’ provident fund) corpus, a detailed scheme of which will be issued in March.
The amounts to be appropriated to a corpus will be used to subsidise the premiums of vulnerable groups such as old age pensioners, BPL card-holders and small and marginal farmers.
“The government doesn't have the right to take these PPF and EPF savings away as these schemes do not impose any limitation periods on investors to withdraw their savings,” said Inder Mohan Singh, partner at Amarchand Mangaldas, adding that trustees can't allow the forfeiture of these funds under the present legal framework.
“This Budget announcement seems to be just a statement of intent, as it would need amendments to several laws including the Indian Trusts Act and the Employees' Provident Fund Act, before it can be implemented," Singh told ET, adding that legal provisions would need to be put in place to enable an investor to come back and recover his unclaimed savings even after the government transfers such funds out.The issue would be taken up by trade unions when they meet the labour minister on Wednesday for the pre scheduled meeting of the Central Board of Trustees. “As a member of the central board of trustees (CBT) of the EPFO, I feel that the government should have discussed the proposal to create a senior citizen welfare fund using the unclaimed amount of EPFO.
Since EPFO is a custodian of this money, the Centre has no right to appropriate this fund even if it is unclaimed,” said AK Padmanabhan, president of the Centre of Indian Trade Unions . Even the RSS-affiliated trade union is strictly against the idea.
“We are totally against the concept as we feel that though the money is unclaimed as of now, someone someday may claim it and hence the Centre cannot use it for its own schemes,” Virjesh Upadhyay, general secretary of the Bhartiya Mazdoor Sangh (BMS) said, adding that the proposal will be opposed when it is taken up officially at the CBT meet.
As a mark of protest, the central trade unions will soon write a joint letter to the finance minister to express their discontent over the proposal. “We are trustees of the Employees’ Provident Fund and the Centre cannot appropriate the unclaimed money that can be claimed for any time by its owners, in which case it is the responsibility of the EPFO to refund that money,” said AD Nagpal, secretary of the Hind Mazdoor Sabha and a member of CBT.
In a letter written to the finance ministry, the All India Trade Union Congress has gone a step forward and recommended that the government should itself fund the senior citizen welfare fund. “The unclaimed amount in EPF cannot be taken over rather confiscated by the government legally as the individual claimant or their successors can claim anytime,” DL Sachdeva, secretary of AITUC said.