The much-anticipated Union Budget is set to be delivered on July 23 by Finance Minister Nirmala Sitharaman. And there's a lot of buzz around possible changes to the Provident Fund. Employees are hopeful that the upper ceiling of the PF, which has remained static at ₹15,000 for a decade, might see a hike.
#NirmalaSitharaman #UnionBudget #Buzz #ProvidentFund #Funds #ModiGovernment
#budget 2024, #providentfund, #financeminister
~HT.97~PR.320~ED.194~
#NirmalaSitharaman #UnionBudget #Buzz #ProvidentFund #Funds #ModiGovernment
#budget 2024, #providentfund, #financeminister
~HT.97~PR.320~ED.194~
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NewsTranscript
00:00Hello and welcome to our special coverage of the union budget 2024. I'm Shravani Sinha
00:05and today we are diving into a topic that has been on the mind of several salaried employees
00:11across the nation, the Provident Fund. The Provident Fund or the PF is a government initiative
00:17that plays a crucial role in ensuring financial independence and social security for employees.
00:24For organizations with more than 20 employees, it's mandatory to register with the Employee
00:28Provident Fund or EPF. Employees earning up to Rs 15,000 a month contribute 12% of their
00:36wages to this fund. This includes both basic pay and earnest allowance, providing a financial
00:43safety net for employees as they approach retirement. Now, the much-anticipated union
00:48budget is set to be delivered on July 23 by Finance Minister Nirmala Sitharaman. And there
00:55is a lot of buzz around the possible changes to the Provident Fund. Employees are hopeful
01:00that the upper ceiling of the PF, which has remained static at Rs 15,000 for a decade,
01:07might see a hike. After EPF regulations, any organization with 20 or more workers must
01:14register with the EPF. The PF contribution for employees is set at 12% of basic wage
01:20or salary, not exceeding Rs 15,000 per month. The employer's contribution is divided into
01:27the EPF, which is 3.67%, and the employee's pension scheme, which is 8.33%, while the
01:35entire employee contribution goes into the PF. The Provident Fund's salary limits have
01:41evolved over the years to adapt to changing economic conditions and wage standards. The
01:48PF salary limit started at just Rs 300 back in 1952. And over the decades, it has seen
01:54several increments, from Rs 500 in 1957 to Rs 1,000 in 1962, and eventually reaching
02:03Rs 1,600 in 1976. The journey didn't stop there. The 80s and the 90s saw limits rising
02:11to Rs 2,500 and Rs 3,500 respectively. By 2001, the limit had jumped to Rs 6,500. And
02:19the most significant hike came in 2014, setting the limit at Rs 15,000, where it stands today.
02:27Initially set at Rs 300 from 1952 to 1957, the limit gradually increased. The primary
02:34goal of the Provident Fund is to provide financial support to employees after retirement. It
02:40also offers flexibility to withdraw funds before retirement for essential needs, like
02:45medical emergencies, home purchase or educational expenses. The Provident Fund is managed by
02:52a central board of trustees, which includes representatives from the federal government,
02:58state governments, employees and employers. This board is supported by the Employees Provident
03:04Fund Organization or EPFO, ensuring efficient management and implementation of the fund's
03:10policies. The last adjustment to the PF limit was in September 2014, when it was increased
03:17from Rs 6,500 to Rs 15,000. Now there is considerable discussion within the Ministry of Labour and
03:25Employment about raising the limit to Rs 25,000. This would align with the threshold set by
03:31the Employee State Insurance Corporation or ESIC in 2017. If approved, this new limit
03:38will lead to higher contributions from both employees and employers. This change is expected
03:44to benefit millions of workers, especially those in the 23 states where the minimum wage
03:50ranges between Rs 18,000 to Rs 25,000. So what can employees expect? Here's why these
03:57changes matter. You will have increased savings. Raising the PF limit will result in higher
04:03contributions leading to greater savings for employees in the long run. Better financial
04:08security. Enhanced contribution means better financial security post-retirement, ensuring
04:14employees have sufficient funds to support themselves. Allotment with current wages.
04:20Updating the PF limit to reflect current wage standards will make the system more equitable
04:26and relevant. Economic stability. With higher savings, the overall income stability of the
04:32workforce is likely to improve, reducing dependency on social welfare systems. As the union budget
04:39announcement approaches, employees are advised to stay informed about the proposed changes.
04:45The potential increase in the PF limit is a development that could reshape the financial
04:50space for millions of workers. With the finance minister's address just around the corner,
04:57the workforce across the country is optimistic about the anticipated enhancements looking
05:02forward to a future of greater financial stability and security. Thank you for joining us today.
05:10Stay tuned for more updates on the union budget 2024. We'll see you next time.