Indians employed in the organised sector are soon likely to have the option of reducing their provident fund (PF) contribution, allowing them to take home more from their salaries, reported The Economic Times, citing labour ministry officials. Currently, the PF contribution is 12 percent of basic salary.
According to the officials cited in the report, the provision is part of the Social Security Code Bill, 2019, that has been approved by the Cabinet and is likely to be tabled in Parliament this week.
The report added that the rationale behind the provision is that allowing employees to take home more will increase consumption, which has been witnessing a fall.
Details on by how much the employees’ PF contribution can be brought down will be worked out after the passage of the Bill, the report said, citing the officials.
Further, the report said the Bill proposes to make fixed-term contract workers eligible for gratuity on a pro-rata basis.
"The labour ministry has also done away with its earlier proposal to give subscribers of the Employees’ Provident Fund Organisation an option to switch to the National Pension System vis-à-vis the Employee Pension Scheme under EPFO," the report said.
First Published: IST