Nirmala Sitharaman said this measure will provide relief to about 6.5 lakh establishments and 4.3 crore employees covered under EPFO.
FM Nirmala Sitharaman addresses press conference over economic relief package on Wednesday. (Photo: ANI)
The government has extended EPF support of Rs 2,500 crore for businesses and workers for three more months — June, July and August — in addition to the measures that were already announced earlier.
Finance Minister Nirmala Sitharaman said, “To ease financial stress as businesses get back to work, the government has decided to continue EPF support for business & workers for 3 more months providing a liquidity relief of Rs 2,500 crore.”
It may be noted, however, that the statutory EPF contribution has been reduced for businesses and workers for three months to 10 per cent from the existing 12 per cent. This means that employees will be able to take away higher salaries while companies will save on employer PF contribution.
Only CPSEs and state PSUs will continue to contribute 12 per cent as the employer’s contribution.
“This scheme will be applicable for workers who are not eligible for 24 per cent EPF support under the PM Garib Kalyan Package and its extension,” Sitharaman said.
Sitharaman went on to say that this will provide relief to about 6.5 lakh establishments and 4.3 crore employees covered under EPFO.
The relaxation of EPF contributions is part of the massive Rs 20 lakh stimulus package released by the government to restart the virus-hit economy.
Read | Explained: PM Modi’s is not a Rs 20 lakh crore Covid-19 package but can stimulate economy
Read | PM Modi speech: Lockdown 4.0 to Rs 20 lakh crore economic package for land, labour and liquidity | Key takeaways