Dinesh Kamath's Editorial 'Employees display their power to Govt' that was published in Newsband

Employees display their power to Govt

Union Labour Minister Bandaru Dattatreya refused to enforce a rule that the employees should be made to empty their provident fund accounts before they turn 58 years old. Earlier, Finance Minister Arun Jaitley withdrew two paragraphs of his Budget with a provision to tax three-fifths of employee PF accumulations at the time of retirement in the face of a widespread political backlash. It first tried to buy peace with a three-month deferral and relaxations to allow employees access to their entire EPF balance for the marriage of children, the purchase of a house, enrolment in an educational course, and switch to a government job.

The Centre’s rationale — ensuring people don’t fritter away their PF savings during their working life — is good in theory. But people often withdraw EPF balances when they change jobs, simply because transfers are not handled smoothly at the PF office.

The present employment market is different from earlier period. There is no job security because of innovations and keen competition. What is in fashion today is thrown to the dustbin next day. Job attrition is on higher scale even in Information Sector. Automation is usurping most of the routine work as is occurring in companies like Infosys and others. We are already aware of the pitiable state of affairs of the traditional sector. Hence the necessity of the early withdrawal use of the terminal benefits and other mandatory contributory scheme. Hence it is better not to tamper with the established schemes which are in force for decades. Hence a deeper and logical analysis should have been undertaken before rewriting EPF Schemes etc. Hope the concerned authorities have learnt the lesson of being careful henceforth onwards.

Rather than focussing all his energies on enhancing the tax base and recovering the recoverable tax and loan arrears on a war footing Jaitley too is following the tried and tested path i.e. screwing up the salaried labour class which presents the minimum risk for any FM and then back track when the resultant problem almost swallows the govt.

The characteristic of the present government is ‘we know what’s best for the people’. But it does not know what the Indian ethos say about planning for retirement. Taking responsibility for older people is the thing that is called for.

It is a pity that the Government woke up to a change in the EPFO rules after a senseless, violent protest causing damage to property and injury to persons.

The turn-around of the government is a win for the power of employees. The governments over the years have been burdening the poor with taxation while the rich are being set off scot- free. The Congress government faced flak when it introduced a penalty on withdrawing specified amount from Bank. All these governments protect Mallyas and mutilate poor.
(Visit Dinesh Kamath's Blog: dkamath.blogspot.in)