About a third of all employers registered with India’s retirement fund manager have not submitted statutory provident fund dues for April, highlighting the broad deterioration in company finances as revenues dried up overnight because of the nationwide lockdown.
Only 321,800 companies paid their statutory employees provident fund dues in April, almost 178,000 fewer than those that paid in the previous month, latest data from the Employees Provident Fund Organization (EPFO) showed. When compared with February, a period when India was unaffected by the pandemic, 199,000 fewer firms paid dues.
“The companies have got some exemptions due to the lockdown, but you must realise that such a high number of companies not submitting dues shows that their revenue is in bad shape,’ said Muralidharan Thyagarajan, chairman of TMI Group, a Hyderabad-based staffing company.
The payment defaults, along with the massive withdrawals seen from the retirement fund by employees since the lockdown started on March 25, present a sombre picture of the extent of devastation caused by the pandemic and the lockdown.
“Yes, EPFO had announced it won’t penalize those who won’t submit dues on time, but you have to remember that 178,000 fewer firms contributing EPF dues—both their own share and millions of their employees’ share—tell us the damage done to the formal sector,” said a person familiar with the development, requesting anonymity.
{{/usCountry}}“Yes, EPFO had announced it won’t penalize those who won’t submit dues on time, but you have to remember that 178,000 fewer firms contributing EPF dues—both their own share and millions of their employees’ share—tell us the damage done to the formal sector,” said a person familiar with the development, requesting anonymity.
{{/usCountry}}There were 654,421 establishments registered with the retirement fund body who submitted PF deductions directly to EPFO in the past one year. Besides, there are 2,557 exempted trusts or firms that manage their own retirement fund corpus under the guidance of EPFO.
The May and June data will perhaps reflect more pain in the formal sector and jobs creation, the person said. Subscribers deposit ₹12,000-14,000 crore a month with EPFO.