Govt asks small firms to retain employees, will fund their PF for 3 months

In a major relief to employers and their employees reeling under the impact of the coronavirus disease, the government on Thursday announced to pay three months provident fund contributions—from both employer and the employee side—for firms with less than 100 employees, 90% of who earn under 15,000 rupees a month.

The announcement was one among several other financial relief measures announced by finance minister Nirmala Sitharaman as part of a comprehensive Rs 1.7 lakh crore package to ease the burden on various sections of the population due to the impact of Covid-19.

The move to make dual contributions to EPFO, a provision for the organized sector, is likely to benefit approximately 4.8 crore workers. Sitharaman announced that the employees will be allowed to make up to 75% of this corpus for meeting the emergent needs in the wake of widespread displacement, cessation of economic activities and other difficulties witnessed during the 21-day national lockdown to fight coronavirus.

“Government to pay employee, employer contribution to PF for 3 months for establishment with 90 per cent of staff with Rs 15,000 wage,” Sitharaman said.

In another move to help a big section of daily wage employees, the government had directed state governments to use the Rs 31,000 crore welfare fund to give direct cash relief to about 3.5 crore construction workers, who are believed to be among those that are hit the hardest from the cessation of economic activity.

For another set of daily wagers employed under the government’s employment guarantee scheme, MNREGA, the wage rate was increased to Rs 202 from the existing rate of Rs 182, directly resulting in a wage raise of Rs 2000 per worker for 100 days of work. This move is likely to benefit 5 crore people.

The finance minister also announced a slew of measures including insurance cover worth Rs 50 lakh per person for sanitation workers, ASHA workers, doctors, nurses and paramedics, free 5 kg rice and 1 kg pulse for approximately 80 crore people through the PDS system, Rs 1,000 ex-gratia for old age pensioners and widows for the next three months and a Rs 500 for woman Jan Dhan account holders.

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