The number of contributing establishments and members to EPFO increased to 4.98 lakh and 4.54 crore in August from the lows of 3.33 lakh and 3.84 crore, respectively, in April, the government data showed.
Around 1.65 lakh establishments and 70 lakh members have returned or newly joined to the Employees’ Provident Fund Organsiation (EPFO) fold between April-August, showing signs of gradual revival in economic activity.
The number of contributing establishments and members to EPFO increased to 4.98 lakh and 4.54 crore in August from the lows of 3.33 lakh and 3.84 crore, respectively, in April, the government data showed.
“The gradual increase, save that for May (31% for establishments and 11% for contributing members), in the coverage of the EPF scheme during the Covid-19 period (March onwards), after a considerabe dip during March and April, shows merely the effect of easing of lockdown,” said XLRI professor KR Shyam Sundar.
“The pick-up is due to the fact that business and industry are gradually resuming economic activities and hence, payroll compliance could take place both due to procedural convenience (staff are available in resumed establishments) and also gradual rise in liquidity for them,” he added.
However, in August, though there were some increase in the number of contributing establishments, the number of contributing members declined a bit from the July level. Analysts attribute this to changes in size composition of complying establishments between July and August.
Still, the August number for both contributing members and establishments are still a little away from the January numbers in which 5.4 lakh establishments and a little over five crore members contributed to the retirement fund.
Also Read: Now the new scheme of ‘guaranteed return’ is coming in ‘pension’, see what will be the benefit
Experts opine that the significant dip in members cannot be explained by the temporary grace period provided by the EPFO in filing returns and making contributions, since although the numbers have increased from May-June, they are still lower than pre-lockdown levels.
During any given month over the past year, the number of ‘contributing members’ of EPFO used to hover roughly in the range of 4.69-4.95 crore. The number increased to five crore in January 2020. A section of the EPF contributors is not regular in contributing; while there are dropouts, a sizeable section of the workforce contribute between 1-11 months in a year.
The statistics from the EPFO clearly show that the lockdowns resulted in a steep dip in the number of contributing establishments from April onwards, indicating an absolute closure of business or suspension of activity. The numbers have shown an upward trend from May onwards, but the number of contributing establishments hasn’t gone back to pre-April levels, showing the long-lasting impact of the lockdown and the long road to economic recovery. The number of contributing members has also steadily increased after April, but remain significantly lower than pre-lockdown levels, demonstrating that there have been job losses and that the job market remains difficult,” said Atul Gupta, partner, Trilegal.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
