Starting from 1st September 2014, the minimum ceiling limit for provident fund has been enhanced to Rs. 15000 per month from Rs. 6500 .

Businesses would now have to compulsorily deduct PF for employees  having salary upto Rs. 15K per month, thus this would be additional expenses and also a compliance cost. However, overall this step would add to financial insurance for the needy. 

 

As a result of the decision, several workers who are currently in the unorganized sector will also be covered. For instance, in cities such as Delhi a daily wage labourer earns up to Rs 8,100 just based on the minimum wages. But employers often do not deduct the mandatory 12% contribution in anything over Rs 6,500. To implement the two decisions, the government has set aside Rs 500 crore for the current financial year, and companies too may be required to increase the spending. For a large part of the working population, EPFO and EPS, which is a part of the contribution made by employees, are the only instruments for old-age planning.

Another steps the Government took is relating to the minimum monthly pension paid to subscribers of the Employees Pension Scheme run by the Employees Provident Fund Organisation. As a result of the notification, each subscriber will now be entitled to a minimum monthly pension of Rs 1,000.

The Finance minister Arun Jaitley earlier had said that there was a large amount of money lying unclaimed in small savings schemes such as public provident funds and post office deposits, which may be used to benefit the active accounts. FM said that these are mostly out of investments belonging to the senior citizens and on their demise, remain unclaimed for want of relevant payment instructions.

The FM further proposed to set up a committee to examine and recommend how this amount can be used to protect and further financial interests of the senior citizens. The committee will give its report not later than December.