Nirmala Sitharaman
Nirmala Sitharaman

A day after Prime Minister Narendra Modi announced a special ecocomic package to support those affected by the novel coronavirus outbreak and the consequent lockdown.

"He laid out a comprehensive vision, after wide and deep consultation with several sections of our society," Sitharaman said, adding that the main aim of the Aatma Nirbhar Bharat Abhiyaan was to spur growth and build a "very self-reliant India".

Nirmala Sitharaman while addressing the plight of employees announces Rs. 2500 crore EPF Support for business and workers for 3 more months.

Nirmala Sitharaman announces reduction of EPF contribution from 12% to 10%

Nirmala Sitharaman said that businesses will continue to face financial stress when they get back to work.

Hence, under Pradhan Mantri Garib Kalyan Package (PMGKP), payment of 12% of employer and 12% employee contributions was made into EPF accounts of eligible establishments.

Earlier, this was provided for salary months of March, April and May

2020 but now this support will be extended by another 3 months to salary months of June, July and August 2020, Sitharaman said.

This will provide liquidity relief of Rs 2,500 cr to 3.67 lakh establishments and for 72.22 lakh employees, Sitharaman added.

Further, Sitharaman announced that the provident contribution of both employees and employers has been reduced.

Nirmala Sitharaman announces reduction of EPF contribution from 12% to 10%

She said that businesses need support to ramp up production over the next quarter. Moreover, it is necessary to provide more take home salaries to employees and also to give relief to employers in payment of Provident Fund dues.

"Therefore, statutory PF contribution of both employer and employee will be reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months," she said.

However, she said that CPSEs and State PSUs will however continue to contribute 12% as employer contribution.

This will provide relief to about 6.5 lakh establishments covered under EPFO and about 4.3 crore such employees.

This will provide liquidity of Rs 6,750 crore to employers and employees over three months.

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