Union Finance Minister (FM) Nirmala Sitharaman, giving the detailed breakup of the economic stimulus package, announced the employees provident fund contribution is being reduced for businesses and workers for three months.
Under the measure, statutory PF contributions of both the employee and the employer will be reduced to 10 per cent from existing 12 per cent each for all businesses under EPFO for next three months.
The measure has been taken to provide more in-hand salary for employees as people’s incomes have been severely hit due to the COVID-19-triggered lockdown. This liquidity support will amount to Rs 6,750 crores, according to the FM.
“In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for Businesses & Workers for 3 months, amounting to a liquidity support of Rs 6750 crores,” said the FM.
Th FM, however, made it clear that the scheme will only be applicable for those who are not eligible for 24 per cent EPF support under PM Garib Kalyan package. The scheme will benefit about 6.5 lakh business establishments and over 4.3 crore employees.
Further extending support to businesses that resumed their work with relaxations in the lockdown but continue to face financial stress, the government has decided to continue its EPF contribution for businesses and employees for three more months - June, July, and August 2020 - giving a liquidity relief of Rs 2,500 crore.
This measure was earlier taken to benefit establishments and workers for three months in March, April, and May.
FM Sitharaman said more such press conferences will be conducted in the coming days to announce all the measures taken under the economic stimulus package announced under Atmanirbhar Bharat Abhiyan by Prime Minister Narendra Modi on Tuesday.
The package is expected to amount Rs 20 lakh crore -- approximately equivalent to 10 per cent of India’s GDP -- including the previous announcements made by the government and the Reserve Bank of India, according to the PM.
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