Job losses due to COVID-19? EPFO closed 71.01 lakh EPF accounts in April-December 2020

New Delhi: Retirement fund body EPFO closed 71.01 lakh employees' provident fund (EPF) accounts during April-December in 2020 when the coronavirus-induced lockdown was at its peak and massive job cuts were reported.

This is higher than 66.66 lakh EPF accounts closed in the same period a year ago, Union Labour Minister Santosh Gangwar informed Parliament on Monday.

"The number of Employees' Provident Fund (EPF) accounts closed during the period from April to December 2020 is 71,01,929," the Labour Minister said in a written reply to the Lok Sabha.

It may be noted that the Centre had imposed a nationwide lockdown to contain the COVID-19 pandemic on March 25, 2020.

According to the minister's written reply, the number of EPF accounts closed in April-December 2019 was 66,66,563. The EPF account is closed for many reasons including superannuation, job loss or changing jobs.

The Union Minister also stated that the number of EPF accounts with partial withdrawal also rose to 1,27,72,120 in April-December 2020 from 54,42,884 in the same period in 2019.

Total withdrawals from EPF account in April-December 2020 rose to Rs 73,498 crore from Rs 55,125 crore in the corresponding period year ago, Gangwar added.

In a separate reply to the House, the Union Labour Minister said that under the Aatmanirbhar Bharat Rozgar Yojna (ABRY), 1.83 lakh establishment or firms have been registered covering 15.30 Lakh employees till February 28, 2021.

As much as Rs 186.34 crore has been released under the ABRY till February 28, 2021, the minister said in his reply.

The ABRY scheme has been launched to incentivize employers for creation of new employment along with social security benefits and restoration of loss of employment during the COVID-19 pandemic.

This scheme being implemented through the Employees' Provident Fund Organisation (EPFO) reduces the financial burden of the employers of various sectors/ industries and encourages them to hire more workers.

Under ABRY, the Government of India is bearing for a period of two years, both the employees' share (12% of wages) and employers' share (12% of wages) of contribution payable.

In another reply to the House, Gangwar said the EPFO has invested Rs 27,532.39 crore in exchange traded funds (ETF) till February 28, 2021. The EPFO had invested Rs 32,377.26 crore in 2019-20 and Rs 27,743.19 crore in 2018-19 in the ETF.

In a separate reply to the House, the Minister stated, "The number of claims settled by Employees' Provident Fund Organisation (EPFO) during the lockdown period (i.E March 25, 2020 to May 31, 2020) were 31,01,818." 

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