Sunday, September 05, 2004

The Rs 1,500-crore Defaulting Employer Guarantee Scheme.

Wonder what Sitaram Yechury and others of his ilk have to say about this news story in The Indian Express.
"...Last month, Ola [Sis Ram Ola, Labour Minister, Government of India] showed Central Provident Fund Commissioner Ajai Singh the door for suggesting that India’s pension and PF system was in need of urgent surgery. Since then, to prove that the system is in good shape, Ola has hinted that EPFO may pay a higher interest rate to provident fund members than the 8.5 per cent that has been proposed. For this, he hopes to mop up the arrears that defaulters (like HEC) owe EPFO.

When EPFO last sat down to do its sums, it calculated that errant employers had defaulted on paying a total of at least Rs 1,511 crore towards their employees’ PF. Of this, in 2003, PSUs alone owed Rs 608 crore.

Considering that when these sums were done, HEC’s default had been calculated at just Rs 20 crore, that amount has grown.

Contrary to the minister’s stand, the EPFO does not pretend that it will be able to recover most of this money. ..."
After all, PSUs are their favourites.


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