“We may revert to the earlier proposal of bringing everything under a unified umbrella body to be headed by the PM,” a senior government official told ET on condition of anonymity.
The ministry’s proposal to corporatise the EPFO had faced severe criticism from labour unions. In its latest draft code on social security released in September, it had proposed a corporate structure, to be headed by a CEO, to manage the provident fund and pension as well as medical insurance for workers.
The redesigning of the code has been fast-tracked following a directive from the PMO and outright rejection from all trade unions at the first tripartite meeting of the labour ministry with all stakeholders on the proposed draft last week, said the official. The third draft of the code on social security, which was released for inviting stakeholder views till October 25, proposed changes to the constitution of both the EPFO and the Employees’ State Insurance Corporation (ESIC), saying the two entities would be corporatised and be headed by CEOs.
The proposal sparked apprehensions in several quarters that putting the huge corpus of the EPFO and ESIC into the hands of corporates would risk the hard-earned money of workers and might not yield returns as high as the current. The EPFO has a corpus of Rs 11 lakh crore while the ESIC sits on a cash pile of Rs 75,000 crore. At present, the two entities work more like autonomous bodies run by trustees and a board, respectively, under the administrative control of the labour and employment ministry.
Though the latest draft proposed to extend the coverage of PF and ESI to temporary workers, it did not outline a comprehensive scheme that would provide social security cover to all. Instead, it merely proposed to amalgamate legislations pertaining to provident fund, pension, medical insurance, maternity benefits, gratuity and compensation.
Besides, it did not provide a uniform definition of social security or suggest any move to create a central fund for it. The existing corpus is proposed to be split into numerous small funds, which could lead to multiplicity of authorities as also confusion, said the official cited earlier. Moreover, he said, under the current proposal there will be no commitment over the government’s contribution.
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5 Comments on this Story
Kalyanaraman N342 days ago
If it isn''t going to be run by government then the hard earned money will not reach the workers for whom the management contributed
P D342 days ago
At present EPFO is exploiting only its subscribers. If corporatised, the employees will not get benefits of government employees includibg pension. So the employees will resist. But it is a fact that epfo is a parasite.
Prabhat Patnaik343 days ago
Social security must be controlled by government. Otherwise all private sector will exploit the employee. As such at present, they pay less and compel to work more hours by avoiding law.