Budget 2018: Govt proposes to contribute 12% of employees' contribution to EPF fund for new jobs

In a major push towards creating a more formal economy and roping in more females into the country's workforce, finance minister Arun Jaitley on Thursday said his government would contribute 12% of the employees' contribution towards provident fund for all new jobs across sectors.

The move is likely to encourage employers hire more people in the formal sector thereby pushing the overall share of country's workforce in the organised sector. Out of country's 500 million workforce nearly 90% is in the informal or unorganised sector, which is often deprived of social security benefits and even minimum wages in some cases.

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Besides, the EPFO Act will be amended to reduce contribution of women to 8% from 12% with no change in employers’ contribution. This would effectively mean higher take away salary for women employees’, Jaitley said in his budget speech.

Economic Survey 2017-18 had pointed out that women participation in the country’s total workforce has come down to 24% in 2015-16 from 36% in 2005-06, prompting government to announce women specific measures.

Government’s flagship schemes like Beti Bachao Beti Padhao and Sukanya Samridhi Yojana along with extension of mandatory maternity to 26 weeks for women employed in public and private sectors and making the crèche facility mandatory for establishments with more than 50 employees are some of the earlier steps in this direction.