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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 Conscience of the Margins

Feb 24
5 min read

On the centenary of her birth, Mahasweta Devi’s work endures as a reckoning with power and neglect.

Born in 1926, Mahasweta Devi remains, even after her death in 2016, one of India’s most formidable literary presences. Few writers have so insistently fused literature with moral urgency or treated writing as an act burdened with responsibility. Prolific she certainly was, producing over a hundred novels, hundreds of short stories and thousands of pages of reportage. As we take stock of this great conscience of the margins on the centenary of her birth, we find that productivity alone does not explain her stature. Mahasweta Devi wrote as if words carried consequences, and lived as though they did.


She was born into an illustrious family. One of her uncles, the late Ritwik Ghatak, became one of the most radical filmmakers India, and perhaps, the world has ever produced. Having migrated to Calcutta during her student days, she did her Master’s Degree in English.


Her early immersion in political theatre through the Indian People’s Theatre Association (IPTA) shaped her understanding of art as agitation. Her first marriage, to Bijon Bhattacharya, whose play Nabanna became an explosive indictment of famine, colonial callousness and capitalist exploitation, placed her squarely within the cultural left. IPTA believed theatre should confront power, not flatter it. Her marriage to Bijon did not last long. He passed away after the estrangement. She married again but that marriage too, fell by the wayside. She never blamed her husbands for their ill-fated marriages.


She was a deeply political social activist who has been working with and for tribals and marginal communities like the landless labourers of eastern India for years; the editor of a quarterly Bortika, in which the tribals and marginal people themselves document grassroots level issues and trends; and a socio-political commentator whose articles appeared regularly in The Economic and Political Weekly, Frontier and other journals. Mahasweta Devi made important contributions to literary and cultural studies in this country. Her empirical research into oral history as it lives in the cultures and memories of tribal communities was the first of its kind in India. Her powerful, haunting tales of exploitation and struggle are seen as rich sites of feminist discourse. Her innovative use of language has expanded the parameters of Bengali as a language of literary expression, by imbibing and interweaving of tribal dialects into her writing.


She turned Bortika into a forum where poor peasants, agricultural labourers, tribals, factory workers, rickshaw pullers and all those who have no voice elsewhere, could write about their lives and problems. Her empirical research into oral history in the cultures and memories of tribal communities was the first of its kind in India. Her powerful, haunting tales of exploitation and struggle are rich sites of feminist discourse. Her innovative use of language has expanded the parameters of Bengali as a language of literary expression, by imbibing and interweaving of tribal dialects into her writing.


“It is not new for my literature to spring from a fight for the rights of these oppressed and downtrodden people. The tribal revolt against the British at the turn of the century formed the backbone of ‘Aranyer Adhikar’ (Rights of the Forest), which the Sahitya Akademi singled out for their awards. My social activism is the driving force of all my literary activities, be it literature - which brought me into the good books of Jnanpeeth (which bestows the highest literary award in India for outstanding work in Indian languages over a sustained period of time to a single writer every year) - my newspaper columns or the journal I edit with writing of members of different tribes. The lives of the bonded labour provided me with a character like Dopdi. Perhaps their stories also impart a narrative immediacy to my language,” said Mahasweta Devi about her work. The reference to Dopadi is a comment on Draupadi, one of her most shocking short stories. It is about Dopdi Mejhen, a tribal revolutionary, who, arrested and gang-raped in custody, turns the terrible wounds of her breasts into a counter-offensive.


Aranyer Adhikar reconstructed the life and rebellion of Birsa Munda, the late-19th-century tribal leader who challenged British authority and missionary intrusion. The novel is neither hagiography nor historical fiction in the conventional sense. It is an act of historical reclamation, restoring agency to a figure marginalised in nationalist narratives.


Her longer novels like ‘Hazaar Chaurasir Maa’ (‘Mother of 1084’) demonstrate a different register of political engagement. Set against the backdrop of the Naxalite movement, the novel follows a middle-class woman confronting the execution of her son by the state. Here Mahasweta probes not tribal marginality but bourgeois complicity, exposing how comfortable lives are insulated from systemic violence. The novel’s power lies in its restraint: outrage simmers beneath an apparently domestic narrative, implicating readers who might otherwise claim neutrality.


She tried to look at society and judge history from the grassroots level, from the people’s point of view that holds true of her first book, Rani of Jhansi. This process eventually took her to the tribals and other marginalised non-tribal people in the 1970s. She turned her attention to the marginalized tribals and untouchable poor of eastern India, particularly Bihar and West Bengal. She travelled widely across Palamau, Chhota Nagpur, and the Santhal Parganas, living with and building an intimate connection with them.


Her Verrier Elwin Memorial lecture in Baroda in 1998 led to the setting up of the Denotified Tribes and Communities Right Action Group. The group brings out a bulletin named Budhan. When Budhan Sabar, a member of the Sabar Khedia tribe of Akarbaid in Purulia district West Bengal, was killed by the police on 17 February 1998, Mahasweta Devi, as president of the Paschim Banga Khedia Sabar Kalyan Samity (of which Budhan was also a member) filed a Public Interest Litigation in the Calcutta High Court. The responsible police officers were suspended, a CBI inquiry was initiated, and Budhan's widow was awarded a compensation of Rs.100,000. She championed the cause of 25 million tribal people in India, who belong to approximately 150 different tribes.


Her world in writing and in lifestyle was too difficult to enter, imbibe and translate without knowing, understanding and internalising the struggles of the marginalised adivasis – the Hos, the Mundas, the Oraons, the Shabars and the Santhals she wrote about. Their social structure is different from our own. The language they speak in, the food they eat, their lifestyle, their customs and rituals, the clothes they wear or do not wear, the sources of livelihood and even the gods they worship are a mystery to mainstream people like us and the filmmakers.


“In my writing, there is a mukti, a liberty. They (the characters) are acting on their own. With liberation, they have freedom to act independently which they do not get in their real lives. I feel this should have been the norm. I just want things to be the way they should have been. So, the question of justice comes in. This process of writing...it comes from so many things: childhood rhymes, proverbs, containing so many stories,” she said.


At a time when Indian writing is increasingly severed from social consequence, her work endures as a reminder that literature, at its most serious, is not an escape from history but an argument with it.


(The author is a noted film scholar who writes extensively on social issues. Views personal.) 

 

 


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