Contributing establishments with retirement fund manager EPFO dwindled to 504,044 in October from 534,869 in September, as per official data.
The fall is the first since May when the country was in lockdown. The situation improved gradually month on month until October’s decline. Alongside, there has also been a fall in the number of EPF members. The number of workers or members contributing to the pension fund fell by 1.8 million in October from the previous month, data accessed by Mint showed. Contributing members dwindled to 476.8 lakh last month from 458.2 lakh in September.
“After a significant fall in April in the number of registered establishments, the number was recovering every month till end September, but in October, it has gone down. It’s a tricky situation as lockdown has eased by then. It could be due to economic contraction and a larger demand scarcity. In such a situation, they may simply be staying away from paying the EPF contribution as well as to save cost,” said a government official who declined to be named.
“Similarly, the number of contributing members was going up since May after falling drastically in April but was still below the pre-lockdown period even in September when the retirement fund saw the highest contributing members in the current financial year,” said the official.
Industry experts and economists argued that the fall in contributing establishments is a clear indication of the economic environment but said this could be part of the bigger crisis industries are facing. A Hyderabad-based steel sector MSME owner said he does not wish to be in the EPFO fold even though he deploys more than 20 workers and is eligible. “I don’t want to increase my cost, face unwanted harassment from the government. Instead, I know how to manage,” he added requesting anonymity.
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