New Delhi: The year-on-year growth in provident fund (PF) contributions under the Employees’ Provident Fund Organisation (EPFO) slowed from 25% in FY23 to 6.5% in FY24, Economic Times reported citing unaudited figures for FY24.
The 6.5% figure is the lowest in the last ten years, with the exception of FY2020-21, when the COVID-19 pandemic prevailed, the newspaper noted.
It said the deceleration in growth in FY24 came amid decreasing net new subscribers to the EPFO and reported that net new formal jobs created under the EPFO in FY24 also decreased 5% year-on-year from 13.8 million to 13.1 million.
EPFO payroll data helps track employment creation in the formal sector because new employees must sign up for a provident fund under the EPFO.
A senior government official speaking to ET said that the scope of the Union government’s Aatmanirbhar Bharat Rojgar Yojana – designed to incentivise EPFO-registered firms to hire employees – having ended could be a reason behind the slowdown in the growth in contributions to PFs.
Under the scheme, the government credited both the employers’ and the employees’ share of the latter’s wages (12% each) to the EPFO, or just the employer’s share, depending on the strength of the firm.
The government provided this benefit if the employees – whose monthly earning wage had to be less than Rs 15,000 – were hired between October 2020 and March 2022.
Speaking to ET, the official cited above also said that the monthly contribution limit of Rs 15,000 per month could be a reason for the decline.
Deloitte partner Saraswathi Kasturirangan told the newspaper that the fact that taxes that kick in once employer contributions to PFs, superannuations and under the National Pension Scheme exceed Rs 7.5 lakh a year may dampen increases in contributions to PFs.
She said this could apply to the government’s decision to tax the interest accrued on employee contributions exceeding Rs 2.5 lakh a year as well.
Also read: Govt Claims of Job Creation Based on EPFO Enrolment Data Are Misleading. Here’s Why.
Public sector banks waived off loans worth Rs 42,000 crore this financial year
Meanwhile, public sector banks waived off loans worth Rs 42,035 crore in FY25 up to September 30, Union minister of state for finance Pankaj Chaudhary said in parliament on Monday (December 9).
The figure for the entirety of FY24 was Rs 1.15 lakh crore.
Lok Sabha MP Anand Bhadauria asked the minister for details on loans written off by public sector banks in the current financial year and the last five financial years, as well as information on the top ten beneficiaries of these write-offs and the amount of bad debt recovered by these banks.
Chaudhary said in his response that banks “write-off non-performing assets (NPAs), including, inter alia, those in respect of which full provisioning has been made on completion of four years, as per [RBI] guidelines and policy approved by banks’ boards.”
He added that “such write-off does not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower.”
“The borrowers continue to be liable for repayment and banks continue to pursue recovery actions initiated in these accounts through various recovery mechanisms available to them,” Chaudhary said.
As of September 30 this financial year, public sector banks recovered a total of Rs 37,253 crore in NPAs, Chaudhary said, citing provisional RBI data.
Loan write-offs are typically undertaken to clean up bank balance sheets by removing fully-provisioned NPAs. However, banks retain the right to recover outstanding dues from borrowers through legal and recovery mechanisms.
