A New Provident Fund Deal

Union Labour Minister Mansukh Mandaviya has identified a comprehensive reform of the Employees’ Provident Fund Organisation (EPFO) and the Employees’ Pension Scheme (EPS) that includes an overhaul of the funds’ IT backbone as well as scope and objectives of the scheme as top priority. A review conducted by the ministry revealed gaps in the grievance redress system and compliance by employers. An economy airline was asked to deposit PF contributions it had deducted from salaries of employees which it had failed to deposit with the fund, and officials have been asked to identify systemic issues behind the pain points in the EPFO system. Ministry officials are now drawing up plans to overhaul the IT system to improve options for employees whether it is withdrawals or tracking the value of their contributions. Looking to widen the appeal of the scheme, the ministry is considering increasing the salary limit for mandatory contributions upward from ₹15,000 a month. The idea is to encourage employees outside the mandatory limit to remain invested in the EPFO system by increasing minimum pension and offering options at the time of final withdrawal that allow individuals to choose from a set of plans rather than accessing the entire amount at one go. Mandaviya feels people getting a large sum of money may not always know the best options for investments. Typically, retirees find themselves pressed by close relatives for money for consumables like a new car or household goods that are not productive investments. So, a retiree can choose to keep a certain sum with the fund and receive a monthly pension. In case of death, the spouse would receive the pension, providing financial security. EPFO will function like a financial banking organisation that provides services that banks do, with the added advantage of a healthy 8.5 per cent interest on deposits. The contributions of employees will continue to be invested in safe venues like PSU bonds and not equities. The minister is clear that EPFO will not function like an investor looking to earn profits and should safeguard contributions in low-risk investments in the manner of a trustee. The government wants to take concrete steps to improve financial security for labour and the lower middle class who have limited surpluses and are more vulnerable to eventualities like sudden illness and inflation.

On Shambhu Border

There is a less-noticed spinoff to BJP’s ‘upset’ victory in Haryana. Security agencies were bracing for a Congress government’s likely decision to lift curbs on the movements of Punjab farm unions halted along the Shambhu border. If Congress had won, the barriers placed by Haryana Police would almost certainly have been lifted, allowing
farm agitators to surge towards Delhi and create a law and order problem. The farm unions had campaigned against BJP candidates with their members opposing the entry of party nominees in villages. A march to Delhi on Republic Day 2021 had turned violent as farm unions had deviated from the agreed route and tried to reach the Red Fort, resulting in violence that held the streets in central Delhi to ransom. Now that BJP is set for another five years in office, the unions might consider the utility of negotiations.

PAC Overreach

The move to summon SEBI chairperson Madhabi Puri Buch before the Public Accounts Committee (PAC) of Parliament headed by KC Venugopal is likely to be a non-starter. The decision to send Buch a notice is based on Agenda No 160 on the long list of issues adopted by the committee for discussion. A subsequent meeting of PAC saw Trinamool MP Saugata Roy raise the matter and soon after reports of Buch being summoned appeared. BJP MP from Godda, Nishikant Dubey, opposed the decision, arguing that issuing summons to Buch was well beyond PAC’s jurisdiction. Dubey says PAC’s mandate is set by reports presented to Parliament by the Comptroller and Auditor General of India (CAG). CAG GC Murmu, who attends meetings of the committee from time to time, holds the same view. The PAC has limited powers that focus on examining reports the CAG submits to Parliament. This is why the CAG report that raised serious allegations of wrongdoing in the auction and allocation of 2G licences during the tenure of the Congress-led UPA government was discussed by the PAC headed by BJP leader Murli Manohar Joshi and became a matter of heated exchanges between Congress and Opposition members. In fact, standing committees such as the one on finance has greater powers and can summon the SEBI chief if it wants to. It had asked then RBI Governor Urjit Patel to appear before the committee when it was headed by Congress leader M Veerappa Moily. Dubey has written to Lok Sabha Speaker Om Birla protesting the summons to Buch and expects Venugopal’s action to be overruled. Congress leaders heading various committees are reminded by the party leadership about BJP’s success in raising issues during the UPA tenures. What the Congress leadership forgets is that investigations into the 2G and ‘coalgate’ scams were based on adverse CAG reports and court orders and that BJP’s numbers while in Opposition were significant.

AAP’s Poor Show

AAP’s non-show in Haryana comes at a bad time for the party. It received less than 2 per cent of the vote and none of its candidates won. Would an AAP-Congress alliance have made a difference? It is hard to tell although AAP candidates have done very poorly. Buoyed by exit polls that showed Congress winning comprehensively in Haryana, AAP leader Arvind Kejriwal had held a meeting claiming BJP’s downfall had begun and promised more “free revdis (freebies)”, a coinage intended to challenge Prime Minister Narendra Modi’s criticism of populist giveaways on grounds that they are a drain on the treasury. Despite hailing from Haryana’s Bhiwani district, Kejriwal has failed to make an impression on the state’s electoral scene. It is apparent that AAP’s ‘Delhi model’ of free power, water, health, transport, and other amenities does not impress Haryana’s residents. Over time, the utility of freebies has come to be questioned in terms of the national capital’s stressed infrastructure. Free water is a lot less attractive when there is very little of it as Delhi residents, including those living in hundreds of unauthorised colonies and slums, found out this summer.

Yogi’s Big Idea

Uttar Pradesh Chief Minister Yogi Adityanath has launched an ambitious scheme to achieve “zero poverty” in the state by leveraging digital technology. The scheme aims to identify the poorest families in every gram panchayat and ensure they get access to state benefits and are able to transition from poverty. The deadline for achieving this in a year is daunting, but the effort is recognition that those at the bottom of the socio-economic pyramid need hand-holding as they may lack awareness of the benefits due to them and are unable to overcome access barriers even if they do know about government schemes.

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