REDEEM YOUR PLEDGE

There are two things the Central Board of Trustees of the Employees Provident Fund Organisation (EPFO) must do at its meeting on Saturday. One, it must give its goahead to the idea of extending the coverage of the Provident Fund Act to establishments with 10 or more employees as against the current norm of 20. And two, it must follow through on the bidding process initiated by it in April this year when it called for bids to manage its corpus. In a scenario where services account for the largest share of GDP, and within the services sector small, rather than large, establishments dominate, adherence to the limit of 20 workers leaves a growing number of workers outside the safety net. It is imperative, therefore, that the Act is amended to cover smaller establishments as well. The rationale behind omitting smaller establishments — that they would find it difficult to comply with all the paper work — is no longer valid in a progressively paperless world where software packages can take out a great deal of the grind. The EPFO, on its part, can make life easier for small units by reducing the demands on establishments under its jurisdiction and by reducing the interface with its (often corrupt) staff.

The trustees must also move fast on selecting new fund managers. After a preliminary weeding out process, a shortlist of 17 fund managers (including some from the private sector) has been drawn up. The final selection must be made from among those shortlisted, and in a transparent manner. The guiding philosophy must be, ‘Let the best man (read fund manager) win’. The animosity towards the private sector, which has long informed the EPFO’s trustees, must give way to a more enlightened, less dogmatic style of decision-making where employee welfare is the only consideration. For too long have hapless employees suffered on account of the EPFO’s inefficiencies: remember, PF deductions are mandatory. Sub-par returns, poor service, low accountability and so on have been the rule, not the exception, all these years. ‘Re-inventing EPF India’, a programme launched by the organisation to provide ‘world-class’ service some years ago has made little difference to actual subscriber experience. Saturday’s meeting could set the ball rolling in that much-needed process of change.

Source: The Economic Times (Editorial)