As times worsen, 10 million Indians empty out savings
It was money set aside for a rainy day. And, well, it’s pouring.
The Employees’ Provident Fund Organisation has confirmed the number of people emptying out their PF accounts — generally seen as a last resort in times of financial distress — has risen by a record 32 per cent in 2008-09, up from a 10 per cent increase the year before.
As layoffs began in what had been a booming Indian economy — about 5 lakh people lost their jobs between October and December 2008, according to a Labour Ministry report — people who had taken loans for everything from homes and cars to luxury vacations were bowled a googly.
“The number of withdrawal applications filed across India crossed the 1-crore mark in 2008-09,” said K. Chandramouli, central provident fund commissioner with EPFO, which manages the Provident Funds of 4.5 crore private sector employees across the country.
Observer Research Founda-tion (ORF), a Delhi-based public policy thinktank, cited a similar trend in a recent study on India and the economic meltdown.
“The impact of the economic turmoil was felt even in the organised sector and about 30 lakh jobs were lost. In the unorganised sector, job losses have been between 80 lakh and 1.2 crore,” said an ORF official, speaking on condition of anonymity as he is not authorised to speak to the press.