Employees in both public and private sector companies have chosen to use the relaxation provided by the government to withdraw their funds from the provident fund savings. The Finance Minister had included this facility as one of the measures to ease the liquidity pain for those affected by the lockdown. Under this, employees can withdraw up to 75% of their PF savings or three months’ salary whichever is lower.
It has now emerged that over 650,000 employees have sought out this facility and the amount withdrawn is around ₹2,700 crore, as per a report in LiveMint. Each day, 30,000 to 35,000 people are approaching the Employees Provident Fund Organisation (EPFO) with their requests. It is not as if the list has employees of only smaller organisations that have withdrawn the funds. It includes employees of blue-chip companies as well. This in a way beats the logic since the concession was meant to help those employees in the private sector who may not be getting their salaries due to the lockdown and are hard-pressed for cash.
Most of the organised companies have released the salaries to their employees, in many cases even ahead of the due dates. Employees of Neyveli Lignite Corporation, located in Tamil Nadu have withdrawn ₹84.4 crore of provident fund money, Visakhapatnam Steel Plant in Vizag (₹40.9 crore), and NTPC Ltd (₹28 crore). Now these are companies which would have released the salaries to their staff on time.
It is understood that this trend of withdrawal is spread across the country and not limited to only a few states or regions.
The issue is a sensitive one with the government requesting the employers to treat their employees with compassion and not to hold back their salaries (and some companies have done so too), many businesses have questioned the rationale saying they have earned zero revenue during the lockdown period and if at all, the government should bear the salaries of such employees.
There is a rumour in the air that the government may announce another package meant to address the problems being faced by the MSMEs (micro, small and medium enterprises).