Business Desk, Etv Bharat:Low-wage salaried workers in India are using their retirement corpus in order to deal with the financial crunch owing to the coronavirus-induced slowdown in the economy.
According to a press release issued by the labour ministry on Tuesday, the Employees' Provident Fund Organisation (EPFO) has settled over 94.41 lakh fund withdrawal claims during April-August 2020, which is around 32% higher compared to the corresponding figure of last year.
Through these claims, EPFO disbursed about Rs 35,445 crore to its members during the period, which is just around 13% higher from a year ago.
Notably, 55% of the claims settled during April-August 2020 were related to the recently introduced Covid-19 advance. To recall, the government in April had made a provision for a non-refundable advance facility under the Pradhan Mantri Garib Kalyan Yojna (PMGKY).
Members could use this facility to withdraw three months’ basic wages -- basic pay plus dearness allowance -- or half of the total accumulation in his or her EPF account (whichever is less) for meeting exigencies due to the COVID-19 situation.
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Another 31% of the advances settled during the April-August period pertained to illness claims, according to the labour ministry.
Now, wage-wise analysis highlights that almost 75% of Covid-19 advances and roughly 79% of illness related claims were settled for PF subscribers belonging to wage slab of less than Rs 15,000.
“Timely availability of PF advances prevented many low-wage earners from falling into debt, providing social security support to the weakest section of workforce during these adverse times,” the labour ministry noted in the release.