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By:

Sumit Ranjan Das

21 August 2024 at 4:08:59 pm

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the...

EPFO’s Big Wage-Band Reset

Twelve years is a long time for a wage ceiling to remain unchanged. The last revision came in September 2014, when the limit was raised from Rs.6,500 to Rs.15,000. Last week, the Union Cabinet approved another increase, taking the ceiling to Rs.25,000 a month with effect from 17 September 2026. The government’s estimate is that more than 51 lakh additional employees will come within mandatory EPFO coverage as a result of the change. For employers and payroll professionals, however, the headline number is only the starting point. The more important questions are who will be covered, which wages will be taken into account and how the revised provisions will be implemented. Wage Ceiling The existing wage ceiling of Rs.15,000 a month is being raised by Rs.10,000, or 66.7 percent, to Rs.25,000. The change takes effect from 17 September 2026 and marks the first revision since September 2014. The government expects more than 51 lakh additional employees to be covered. Estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore. The standard contribution remains 12 percent each from the employee and employer, subject to applicable provisions. The Cabinet said the decision will expand access to provident-fund savings, pension protection under the Employees’ Pension Scheme (EPS) and insurance protection under the Employees’ Deposit Linked Insurance Scheme (EDLI), in accordance with the applicable scheme provisions. The wage ceiling is not merely an administrative threshold. It determines the point at which mandatory EPF coverage applies under the existing framework. At present, a fresh employee joining employment at wages above Rs.15,000 a month is not automatically brought within mandatory EPF coverage and may remain outside mandatory provident-fund, pension and associated insurance protection, subject to applicable statutory provisions. The revised ceiling will bring a substantial section of employees earning between Rs.15,000 and Rs.25,000 within the mandatory coverage framework. The government has also quantified the fiscal impact. The estimated expenditure is about Rs.56,696 crore over five years, while annual government outgo is expected to rise to approximately Rs.11,339 crore, compared with existing annual budgetary support of about Rs.10,250 crore. The Labour Ministry has linked the revision to sustained wage growth, rising incomes and the continued expansion of formal employment since the previous revision in 2014. Payroll Illustration Consider an employee earning Rs.22,000 a month who becomes subject to mandatory coverage under the revised ceiling. At the standard 12 percent contribution rate, if the full eligible wage is used as the contribution base, the employee’s contribution would rise from Rs.1,800 to Rs.2,640 a month, while the employer’s contribution would similarly rise from Rs.1,800 to Rs.2,640. Total monthly contributions would therefore increase from Rs.3,600 to Rs.5,280 — a combined increase of Rs.1,680. However, this should not be treated simply as Rs.1,680 of additional employee savings. Contributions are allocated between EPF and EPS components as prescribed, with the EPF component accumulating in the employee’s account and the EPS component providing pension benefits subject to scheme conditions. The Rs.22,000 example is illustrative, not a universal payroll formula. The final treatment of wage components, existing employees in this band, EPS allocation and transitional matters will depend on the statutory notification and EPFO implementation instructions. For payroll professionals, the immediate task is to assess the operational impact. Key questions include the effective date for existing employees and new joiners, which wage components will count towards PF, whether the 10 percent concessional rate for notified establishments will continue, how the revised ceiling will interact with EPS pensionable wages, and what changes will be required in payroll systems. The Cabinet approval establishes the policy decision; the formal Gazette notification and EPFO instructions will determine how it is translated into payroll processes. The revised ceiling is the first increase since September 2014 and is expected to bring more than 51 lakh additional employees, particularly those in the Rs.15,000-Rs.25,000 wage band, under mandatory EPFO coverage. For them, the change can expand access to provident-fund savings, EPS pension and EDLI insurance, subject to scheme provisions. For employers, it means reviewing payroll costs, employee data, eligible wage components, contribution calculations and compliance systems. The government has described the move as part of efforts to extend statutory social security and strengthen formal employment. The policy has been announced. For payroll professionals, the next chapter is implementation. (The writer is a Cost and Management Accountant and founder of TaxoDas. Views personal

Delhi Chokes as Science Stands Back

Nov 26, 2025
4 min read

A nation aspiring to scientific leadership cannot afford a capital city where breathing becomes dangerous for weeks at a time.

Each winter, Delhi descends into a familiar haze so thick that even routine life slows down. Flights are delayed, highways are shrouded in grey, hospitals record a spike in respiratory cases, and millions of citizens breathe air that would be classified as hazardous anywhere in the world. For more than a decade, this pattern has repeated itself with the regularity of a season. It is not an accident or a natural calamity. What makes this crisis particularly troubling is not only the scale of pollution, but the silence of the very community that understands it best: India’s scientists.


Well Established

The factors that create Delhi’s winter smog are well established. Crop-residue burning in Punjab and Haryana releases massive amounts of particulate matter into the atmosphere. Delhi’s vehicles, numbering over 1.3 crore, add nitrogen oxides, carbon monoxide, and ultrafine particles. Industrial emissions, construction dust, waste burning, diesel generators, and stagnant winter winds seal the toxic mix over the region. The science behind this is straightforward. Data is abundant. Despite this clarity, the crisis persists year after year.


What makes this situation particularly ironic is India’s scientific capability. The same country that can reach the lunar south pole, develop world-class vaccines in record time, and build nanomaterials atom by atom seems unable to control air pollution in its capital. The problem is not a lack of knowledge or expertise. It is the lack of a sustained, science-driven response and the absence of a strong collective voice from the scientific community demanding one.


India already has technological solutions. Satellite-based fire detection systems can pinpoint stubble burning almost in real time. Bio-decomposer technologies, pelletisation units, and farm mechanisation offer alternatives to residue burning. Urban transport experts have long advocated for better public transport, electrified mobility, parking reforms, and congestion management. Environmental engineers have created dust-control guidelines, cleaner construction practices, and urban designs that allow better air circulation. Meteorologists can forecast smog events days ahead. Medical scientists can clearly explain the health impacts of particulate pollution.


Muted Voices

In private conversations, many scientists express deep frustration. They know that India is not short on expertise but short on follow-through. They believe the crisis is less about science and more about fragmented governance, political vacillation and lack of sustained enforcement. They recognise that emergency responses, odd even schemes, short-term bans, school closures, are signs of panic, not strategy. But most hesitate to speak publicly. Some fear being misunderstood as political. Others feel environmental issues do not fall squarely within their discipline.


Delhi’s air pollution is a public health crisis, not merely an environmental issue. Several international studies estimate that air pollution contributes to more than a million premature deaths annually in India. Fine particulate matter (PM2.5) enters deep into the lungs, enters the bloodstream, and increases the risk of asthma, chronic obstructive pulmonary disease, heart attacks, strokes, diabetes, adverse pregnancy outcomes, and impaired brain development. The health impacts on children are especially alarming. A child exposed to Delhi’s pollution for several winters may never achieve normal lung capacity. This is not an abstract statistic; it is a lifelong burden.


The economic cost is severe as well. Lost productivity, increased hospital visits, long-term healthcare needs, and reduced quality of life together impose a large financial strain. Delhi’s smog also damages India’s global image. A nation aspiring to scientific leadership cannot afford a capital city where breathing becomes dangerous for weeks at a time.


History shows that severe air pollution is reversible when scientific thinking guides policy. After the Great Smog of 1952, London passed strong Clean Air Acts that changed fuel patterns. Los Angeles invested in emission standards, cleaner fuels, and monitoring networks over decades. China launched aggressive air-quality action plans beginning in 2013 and achieved dramatic reductions in PM2.5 levels in major cities. These examples prove an important point: atmospheric chemistry may be complex, but air pollution is ultimately a governance challenge. When evidence informs action, results follow.


What, then, is the role of India’s scientific community? Scientists do not need to become activists or enter politics. But they must speak clearly and collectively. They must frame Delhi’s smog as a national challenge, not a seasonal nuisance. They can demand reliable, independent air-quality monitoring and public reporting. They can highlight why fragmented interventions fail and why coordinated, year-round action is essential. Some argue that governance is not a scientist’s responsibility, but this misses the modern role of science.


In a knowledge-based society, science is not only about discoveries; it also guides public reasoning. When scientists fall silent, policy is driven by impulse rather than evidence. When they speak collectively and clearly, they correct misconceptions, add discipline to debate, and strengthen public demand for long-term solutions.


Delhi’s smog persists because it has been normalised. People expect to suffer in November and December. Governments expect criticism. Scientists expect to be consulted only in closed rooms. Citizens expect no real change. This quiet acceptance is perhaps the most dangerous aspect of the crisis. When society adapts to a problem that should never be accepted, meaningful action becomes harder.


India is moving rapidly toward a future defined by climate adaptation, sustainability, and technological leadership. A country that positions itself as a science-led economy cannot allow its capital to become unliveable for a season every year. The health of millions, the productivity of the workforce and the credibility of the nation’s scientific aspirations all depend on sustained action.


Scientists cannot solve Delhi’s smog alone, but they can no longer remain silent. The health consequences are documented. The solutions are known. What India needs now is a stronger scientific voice, firm, evidence-based, and unwavering.


(The author is the former Director, Agharkar Research Institute, Pune; Visiting Professor, IIT Bombay. Views personal.)

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