The Union Cabinet on Wednesday approved a proposal to extend the scheme for the payment of employers and employees' PF contributions for three months until August.
Finance Minister Nirmala Sitharaman had announced the extension of the benefit in May this year under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) amid the COVID-19 pandemic.
"Cabinet has approved the extension of the scheme where the government pays contributions of employees and employers till August," Union Minister Prakash Javadekar told reporters after the Cabinet meeting on Wednesday.
Under the Pradhan Mantri Garib Kalyan Package, the payment of 12 per cent of employer and 12 per cent employee contribution was made into EPF accounts.
For the wage months of June, July and August 2020, the scheme will cover all the establishments having up to 100 employees and 90 per cent of such employees earning less than Rs 15,000 monthly wage.
The benefit was provided earlier for salary months of March, April and May 2020. This support is extended by another three months to salary months of June, July and August 2020.
"The Union Cabinet chaired by the Prime Minister Narendra Modi today has given its approval for extending the contribution both 12 per cent employees' share and 12 per cent employers' share under Employees Provident Fund, totalling 24 per cent for another three months from June to August 2020, as part of the package announced by the government under Pradhan Mantri Garib Kalyan Yojana (PMGKY)/ Aatmanirbhar Bharat in the light of COVID-19, a pandemic," an official statement said
"The approval is in addition to the existing scheme for the wage months of March to May 2020 approved on April 15, 2020. The total estimated expenditure is Rs 4,860 crore. Over 72 lakh employees in 3.67 lakh establishments will be benefitted," the statement said.
Javadekar said that the decision has been taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues. The government had imposed a lockdown on March 25 to fight the deadly COVID-19.
The extension of the benefit will provide liquidity relief to 3.67 lakh establishments.
The statement said that the government will provide budgetary support of Rs 4,800 crore for 2020-21 for this purpose.
The beneficiaries entitled for 12 per cent employers' contribution for the months of June to August 2020 under Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) will be excluded to prevent overlapping benefit.
Due to prolonged lockdown, it was felt that businesses continue to face a financial crisis as they get back to work. Therefore, the Finance Minister, as part of Aatmanirbhar Bharat, announced on May 13, 2020, that the EPF support for business and workers will be extended by another three months viz. for the wage months of June, July, and August 2020, the statement said.
The government is of the view that businesses need support to ramp up production over the next quarter (July-September), it added.
