Narendra Modi govt could dissolve EPFO's regulatory role, mulls separate entity to avoid conflict of interest

The Narendra Modi authorities is reportedly mulling over relieving the Workers’ Provident Fund Organisation (EPFO) from its regulatory function and forming a separate entity to carry out these features, a media report stated.

The rationale behind that is to keep away from a battle of curiosity as EPFO is the nation’s largest provident fund supplier and in addition the regulator for such entities, Monetary Specific reported.

The report, citing official sources, stated that following a suggestion from the finance ministry, the labour ministry has already began engaged on the proposed bifurcation. The Parliament, nonetheless, has to approve adjustments within the current construction of the EPFO.

In August, a Parliamentary panel had recommended that EPFO ought to act as the only regulator for all classes of provident funds, significantly non-public PF trusts.

“The committee has strongly beneficial that the federal government if required, might amend numerous Acts and authorise Workers’ Provident Fund Organisation (EPFO) to behave as the only regulator for all classes of provident funds.”

Representational picture. PTI

It stated that ministries of finance and labour knowledgeable {that a} consensus had been developed within the authorities departments that the EPFO ought to act as a sole regulator for all such provident funds trusts together with these managed by the exempted, excluded and different classes of organisation or institutions.

The Committee was satisfied {that a} sturdy regulatory system needs to be in place for all PF trusts.

At current, the panel famous that the EPFO is just not the only PF organisation or regulator within the nation. The provident fund of personal institutions/organisation/PSUs largely come below the EPFO purview.

There are two classes exempted and excluded. Beneath the exempted classes, the EPFO has the facility to exempt giant organisation from depositing EPF with the physique. The EPF may be maintained by a belief created by the organisation for the aim.

Beneath the excluded class, a specific business’s PF has been excluded from purview of the EPFO below numerous Acts. These provident funds regulated by totally different ministries like transport, coal, railways, banking, authorities PF and different PFs.

The panel noticed that there isn’t a formal regulating system for an organisation on issues of PF below the PF Act 1925 and the excluded class of PF is just not regulated both by their respective ministry or the EPFO.

With inputs from PTI

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