As many as 100,000 people a day have dipped into their statutory retirement savings on an average in the past three weeks as they grappled with income and job losses, a factor that may hold back a swift economic recovery.
While established companies have let go of their employees because of Covid 19-related disruptions, new jobs are being created at a snail’s pace, data from the Employees’ Provident Fund Organisation (EPFO) accessed by Mint showed.
Since April 1, more than 5.5 million salaried workers have withdrawn money from their employees’ provident fund (EPF) accounts, the data showed. More than 5.58 million claims worth around ₹15,000 crore have been settled so far this fiscal by EPFO, as per data. The fact that close to 2 million people have withdrawn their savings between June 9 and June 29 points to the fact that hardships of India’s salaried class continue even after the government has eased lockdown curbs.
Of the total withdrawals since April, nearly 60% were non-Covid-19 withdrawals, said a government official, requesting anonymity. While Covid-19-related withdrawals were designed as a temporary measure to help EPFO subscribers during the lockdown period, non-Covid-19 withdrawals reflect rising instances of job and income losses.
As many as “5.57 million on last count…It’s a huge outgo and reflective of the market conditions caused by the Covid-19 pandemic”, the government official added. “The Covid-19 advance has been a great help to EPFO’s members during these difficult times, especially for members with monthly wages of less than ₹15,000. Receiving the Covid-19 advance to the extent of basic wages and DA for three months or up to 75% of the amount standing to member’s credit in the EPF account, whichever is less, has provided timely relief to many workers, preventing them from falling into indebtedness,” EPFO had said in a recent statement.
The retirement fund manager has been claiming that its technology adoption in recent months has helped it make faster payments and ensure “social security support for its members in times of crisis”. Though a fresh breakup of withdrawals data is not immediately available, the EPFO had in June said that a look at wage slab-wise data indicates that more than 74% of the total claimants during the lockdown were subscribers who earn less than ₹15,000 a month each.
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