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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

Pune’s changing political guard

Nov 16, 2025
3 min read

After an eight-year hiatus, the municipal elections promise to usher in a new cohort of politicians and reset the city’s political rhythms

Pune: The long-delayed civic polls herald a generational shift in Pune, arguably Maharashtra’s most politically vibrant city. When voters return to the booths in December, they will be resetting the circuitry of local power.


The last municipal elections were held in 2017. Since then, the city’s politics have drifted into a liminal space. The Pune Municipal Corporation’s (PMC) term expired in May 2022, but the state dithered, leaving India’s seventh-largest city without elected urban governance for almost three years. With the prospect of polls repeatedly deferred, many former corporators had since quietly receded from the daily grind of politics, returning to business interests or simply losing relevance.


When the long-pending reservation lottery for civic wards was finally conducted recently, it delivered another shock: dozens of established male aspirants discovered that their seats had vanished from under them.


New guard

All this has created an unusual political vacuum that younger leaders are eager to fill. Parties across the spectrum, from the BJP to the Congress to the NCP factions, are preparing to field fresher faces. Regardless of who wins, Pune seems destined to witness the rise of a new political class.


The churn is already visible. In the 2024 Lok Sabha election, both the BJP’s Murlidhar Mohol and the Congress’s then-candidate Ravindra Dhangekar were relative newcomers to national politics. The city’s Assembly seats have also produced new faces in recent years, including Hemant Rasne and Sunil Kamble. Ajit Pawar’s Nationalist Congress Party elevated Subhash Jagtap and Sunil Tingre to leadership roles, giving them a platform to shape the party’s urban strategy. Even the Aam Aadmi Party (AAP), a peripheral entity in Pune’s political landscape, is preparing to contest the civic polls with a wholly new leadership slate.


The party most uneasy about this transition may be the Congress. Despite routinely polling between 550,000 and 600,000 votes in the city, it has struggled to convert electoral presence into organisational revival. As the Bihar election results were being announced recently, one Pune resident summed up a sentiment widely shared among Congress sympathisers: the party has votes, but not enough dynamic young leaders to carry them. The question, as he put it, is not whether the youth can help the Congress, but whether the Congress will let them.


Rewind to the early 2000s, and Pune’s political landscape looked very different. The Congress then had a formidable bench which included Suresh Kalmadi, Chandrakant Shivarkar, Mohan Joshi, Ramesh Bagwe and Abhay Chhajed. The BJP had Pradeep Rawat, Anil Shirole, Girish Bapat, Vijay Kale, Vishwas Gangurde and Dilip Kamble. Sharad Pawar’s NCP, then ascendant, rested on leaders like Ajit Pawar, Ankush Kakade, Vandana Chavan and Ravi Malvadkar. But the 2014 BJP wave flattened the hierarchy. The Congress crumbled; Kalmadi and Rawat faded from view; Gangurde exited the stage. The BJP replaced its old guard with Medha Kulkarni, and then Mukta Tilak, Chandrakant Patil, Bhimrao Tapkir, Madhuri Misal and Jagdish Mulik. Now, as Pune approaches the end of 2025, even Mohol - the BJP’s rising star - risks appearing ‘senior’ in a political landscape tilting toward younger contenders.


Demographics are accelerating the shift. Given that Pune’s last civic polls took place eight years ago, an entire cohort of voters since then has reached adulthood. They cast their first ballots in the recent Lok Sabha and Assembly elections; now they will vote in municipal elections for the first time. Their concerns include urban mobility, climate resilience, digital governance, employment differ sharply from the older generation’s priorities. Their political loyalties, still fluid, are likely to crystallise around leaders who can speak to these new anxieties.


The coming election promises a radical change in Pune’s political ecosystem. Long dominated by legacy figures, that ecosystem is set for nothing less than a generational reset. The departure of veteran leaders, the decennial rebalancing of parties, and the impatience of a newly enfranchised urban youth all point towards a younger, more competitive, and possibly more unpredictable political order.


Whether this transition will deliver better governance remains to be seen. But one thing is clear: the next generation seems determined not to wait another eight years to make itself heard.

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