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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

The Architects of Modern India: Five Leaders Redefining Infrastructure Beyond Concrete

Correspondent
Jul 18
3 min read

For decades, India's infrastructure story was measured in kilometres of highways, megawatts of power generation, ports, airports and industrial corridors. Today, that definition is evolving. Infrastructure is no longer limited to physical assets; it increasingly includes digital platforms, AI-ready data centres, renewable energy networks and smart urban ecosystems that power economic growth.


This transformation is being shaped by a new generation of business leaders who view infrastructure as an interconnected system rather than standalone projects. While their strategies differ, they share a common objective: building resilient, technology-enabled platforms that will support India's long-term development. From artificial intelligence and digital engineering to integrated logistics, transmission networks and commercial ecosystems, these leaders are redefining what nation-building looks like in the twenty-first century.


SN Subrahmanyan (Larsen & Toubro)

Among India's infrastructure leaders, L&T Chairman SN Subrahmanyan represents the convergence of engineering excellence and digital transformation. Having joined Larsen & Toubro (L&T) as a project planning engineer in 1984, he spent four decades leading some of the company's most complex infrastructure projects before becoming Chairman and Managing Director in 2023. That progression from engineer to business leader has shaped his belief that infrastructure must continually evolve to meet the needs of a changing economy.


Guided by that philosophy, SN Subrahmanyan is steering L&T beyond its traditional engineering and EPC strengths through its Lakshya 2031 strategy, with investments in AI infrastructure, digital engineering, data centres and clean energy. The company's collaboration with NVIDIA to develop sovereign AI infrastructure reflects his view that the next phase of India's growth will depend as much on digital infrastructure as on physical assets. His leadership demonstrates how established engineering companies can embrace emerging technologies while preserving their execution-first culture.


Gautam Adani (Adani Group)

For Gautam Adani, infrastructure is most valuable when assets function as an integrated ecosystem. Rather than building isolated businesses, the Adani Group connects ports, logistics parks, airports, renewable energy projects and transmission networks into a unified platform that strengthens trade and industrial growth.


The next phase of this strategy is increasingly digital. Automation, data-driven operations and intelligent logistics are improving efficiency across the group's infrastructure assets, while large-scale renewable energy investments continue to support India's energy transition. Adani's approach highlights how infrastructure leadership is shifting from owning individual assets to creating connected systems that generate long-term economic value.


Vinayak Pai (Tata Projects)

As Managing Director of Tata Projects, Vinayak Pai has championed the use of digital engineering to improve infrastructure execution. His focus is on planning projects more intelligently rather than simply delivering them faster.


Technologies such as Building Information Modelling (BIM), integrated project controls and digital collaboration help identify design conflicts before construction begins, reducing delays and improving coordination. Their application across projects, including the new Parliament building and Noida International Airport, demonstrates how engineering precision increasingly depends on digital capabilities. Pai's leadership reflects a growing industry belief that successful infrastructure starts long before work begins on site.


Vimal Kejriwal (KEC International)

Few infrastructure sectors are as strategically important—or as overlooked—as power transmission. Under Vimal Kejriwal, KEC International continues to expand the networks that connect renewable energy generation with industries, cities and communities.


As India accelerates its clean-energy ambitions, resilient transmission infrastructure is becoming essential to ensuring reliable electricity reaches end users. KEC's work across transmission, railway electrification and civil infrastructure in more than 110 countries reflects the importance of building the systems that support economic activity behind the scenes. Kejriwal's leadership underscores the critical role of energy connectivity in India's infrastructure future.


Rajiv Singh (DLF Limited)

For Rajiv Singh, commercial real estate has evolved into economic infrastructure. Rather than developing standalone office buildings, DLF has focused on creating integrated urban destinations that combine workplaces, hospitality, retail, residential communities and public spaces.


Developments such as DLF Cyber City have helped transform Gurugram into one of India's leading business hubs, supporting multinational companies and thousands of knowledge-economy jobs. As businesses increasingly prioritise sustainability, digital connectivity and employee experience, integrated commercial districts are becoming long-term economic assets. Singh's approach illustrates how cities themselves have become critical infrastructure for India's services-led economy.


Infrastructure's Next Definition

These five leadership models reflect a broader transformation in India's development story. SN Subrahmanyan demonstrates how engineering companies are extending into AI and digital infrastructure. Gautam Adani shows the value of integrated infrastructure ecosystems. Vinayak Pai highlights the growing role of digital engineering in project execution. Vimal Kejriwal reminds us that transmission networks are fundamental to the clean-energy transition, while Rajiv Singh illustrates how commercial districts have become engines of economic growth.


The next era of infrastructure will not be defined solely by the scale of assets built, but by how effectively physical infrastructure, digital intelligence and long-term institutional capability work together. That convergence is shaping a more connected, resilient and technology-driven India.

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