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Ludhiana: Industry body terms state’s labour fund hike unjustified, calls for rollback
FICO leaders also criticised the lack of industry consultation, warning that such unilateral decisions damage business sentiment and increase compliance pressure on small and medium enterprises already struggling with inflation and high taxes
The Federation of Industrial and Commercial Organisation (FICO) has strongly opposed the Punjab cabinet’s recent decision to double monthly contributions to the Punjab Labour Welfare Fund, calling it an unjust and unnecessary financial burden on both employers and employees.
On Friday, the cabinet approved a revision in contribution rates, raising the employee share from ₹5 to ₹10 and the employer share from ₹20 to ₹40 per month. While the government claims the move will strengthen worker welfare schemes, FICO has rejected the rationale, citing poor utilisation of existing funds.
“This increase serves no purpose when the current welfare fund has never been meaningfully used for labour benefit,” said Gurmeet Singh Kular, president of FICO.
“Employers and workers are already contributing to Provident Fund, ESI, and Labour Welfare Fund. This hike only adds to their burden without any visible returns,” Kular added.
FICO has demanded an immediate rollback and questioned the government’s transparency in managing the fund.
“Crores are already lying unspent in the Labour Welfare Fund,” said Manjinder Singh Sachdeva, general secretary.
“The government should first demonstrate how existing funds are being used before demanding more. Raising contributions without accountability is irresponsible,” he added.
FICO leaders also criticised the lack of industry consultation, warning that such unilateral decisions damage business sentiment and increase compliance pressure on small and medium enterprises already struggling with inflation and high taxes.
While the government maintains the hike will support worker-oriented schemes, it has yet to clarify how the existing corpus has been utilised or specify the new benefits it intends to introduce.
FICO has urged the Punjab government to engage with industry bodies, audit current fund usage and reconsider the contribution hike in the interest of economic sustainability and labour equity.
