Union Budget 2019: Govt's contribution to employees' provident fund to go up to 14% from 10%, gratuity ceiling hiked to Rs 20 lakhs

Interim Finance Minister Piyush Goyal on Friday announced in his Interim Budget speech that the government will now increase its contribution to employees' provident fund to 14% from the earlier 10% while keeping the contribution of workers intact at 10%.

FP Staff February 01, 2019 14:56:34 IST
Union Budget 2019: Govt's contribution to employees' provident fund to go up to 14% from 10%, gratuity ceiling hiked to Rs 20 lakhs
  • Minimum pension for every labourer has been fixed at Rs 1,000 per month

  • In addition, maximum ceiling of the bonus given to labourers has been increased from Rs 3,500 a month to Rs 7,000 a month

  • The ceiling of eligibility cover under the Employees' State Insurance has been increased from Rs 15,000 a month

Finance Minister Piyush Goyal on Friday announced in his Interim Budget speech that the government will now increase its contribution to employees' provident fund to 14 percent from the earlier 10 percent while keeping the contribution of workers intact at 10 percent.

"High growth and formalistation of the economy has led to the expansion of employment opportunities as shown in EPFO membership, which has increased by nearly two crore in two years reflecting formalisation of the economy and job creations," Goyal said in his speech.

Union Budget 2019 Govts contribution to employees provident fund to go up to 14 from 10 gratuity ceiling hiked to Rs 20 lakhs

Representational image. PTI

The EPFO is the Employees' Provident Fund Organisation which assists the government administering a compulsory contributory Provident Fund Scheme. The move is expected to delight both government and private sector employees who benefit from it.

Minimum pension for every labourer has been fixed at Rs 1,000 per month.

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In addition, the maximum ceiling of the bonus given to labourers has been increased from Rs 3,500 a month to Rs 7,000 a month and the maximum ceiling of their pay has been increased from Rs 10,000 per month to Rs 21,000, in keeping with the liberalisation of the New Pension Scheme after the submission of the Seventh Central Pay Commission report, said Goyal.

"During the last five years the minimum wages of labourers of all categories have been increased by 42 percent, which is the highest ever," he said.

The ceiling of payment of gratuity has been enhanced from Rs 10 lakh to Rs 20 lakh.

The ceiling of eligibility cover under the Employees' State Insurance has been increased from Rs 15,000 a month to Rs 21,000 a month.

In the event of the death of a labourer during service, the amount to be paid by EPFO has been enhanced from Rs 2.5 lakh to Rs 6 lakh. Under Anganwadi and Asha Yojana, honorarium has been enhanced by about 50 percent for all categories of workers.

"Our government firmly believes that workmen and all the people working in government services should get the benefit of the fast-growing economy. During the last five years India has witnessed industrial peace," Goyal said in his speech.

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