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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 Reluctant Deputy Who Returned as King

Writer: Rajendra Pandharpure
Rajendra Pandharpure
Jul 21, 2025
4 min read

Devendra Fadnavis, once denied his due, is the state’s Chief Minister again and a strong contender for Delhi

In the eternally fluid politics of Maharashtra, the suffix ‘saheb’ carries great weight. It is not lightly bestowed, especially not on someone from Vidarbha - a region often marginalised in Maharashtra’s political landscape and the political spectrum in general.


The fact that present Chief Minister Devendra Fadnavis, a Bharatiya Janata Party (BJP) legislator from Nagpur, has come to be addressed simply as ‘Fadnavis Saheb’ is testament to his commendable transformation from just an ardent BJP loyalist and technocrat into a commanding force in Maharashtra politics, on par with a personage no less than Nationalist Congress Party (SP) chief Sharad Pawar.


As he turns 55 today, it is time to take stock of Fadnavis’ ascent. His rise has been anything but meteoric, but it has been relentless. Born into a political family in which his father Gangadharpant was a legislator and his aunt, Shobha Fadnavis, served as a minister, Devendra entered public life through the ideological nursery of the Rashtriya Swayamsevak Sangh (RSS). Fresh out of college, he contested elections to the Nagpur Municipal Corporation and, at 25, became one of its youngest mayors.


The Maharashtra BJP at the time was dominated by stalwarts: Pramod Mahajan, Nitin Gadkari in Nagpur, Gopinath Munde in Marathwada and Eknath Khadse in north Maharashtra. Yet Fadnavis persevered. Known for his loyalty to the party and his aptitude for governance, he steadily built networks across districts, earning trust within the BJP’s state apparatus.


His moment came in 2013 when he was appointed state party president. The same year, Narendra Modi was declared the BJP’s candidate for Prime Minister. Fadnavis, buoyed by Modi’s messaging and personal magnetism, plunged into electioneering with evangelical fervour. Modi took note and when the BJP emerged as the single largest party in Maharashtra in 2014, Fadnavis was rewarded with the Chief Minister’s chair at just 44 - making him the second-youngest in Maharashtra's history after Sharad Pawar.


As Chief Minister, he sought to blend rural reform with urban modernisation. He launched the Jalyukt Shivar Abhiyan to make villages drought-resilient and advocated for farm exports to tap global markets. He repeatedly argued that farmers should be made self-reliant rather than trapped in cycles of debt and relief. At the same time, he oversaw large-scale urban infrastructure projects like the Mumbai Metro expansions, the Vadhavan Port, Purandar Airport, the Samruddhi Mahamarg (an expressway connecting Nagpur to Mumbai) and the redevelopment of Asia’s largest slum, Dharavi.


Fadnavis also pitched Maharashtra to foreign investors, strengthened industrial zones and promised law-and-order stability to entrepreneurs. His administration laid the groundwork for a ‘fourth Mumbai’ in Palghar and sanctioned a steel plant in Maoist-hit Gadchiroli, where Naxalism has since receded. Under his watch, even previously restive districts like Chandrapur have seen an uptick in prosperity.


Yet politics rarely rewards continuity. In 2019, though the BJP-Shiv Sena alliance led by Fadnavis won a majority, the Sena switched sides, joining hands with the Congress and the Nationalist Congress Party (NCP) to form the Maha Vikas Aghadi (MVA). Fadnavis, denied a second term, accepted the role of Leader of the Opposition. From that seat, he remained the centre of political gravity in shaping legislative debate, cornering the MVA on scandals and keeping his party's base energised.


The pandemic paralysed politics in 2020–21 but in 2022, Maharashtra’s political landscape shifted again. Shiv Sena leader Eknath Shinde led a rebellion against then CM Uddhav Thackeray’s leadership of the Sena, bringing down the MVA government. The BJP-Shinde faction reclaimed power, but Fadnavis was curiously asked to play second fiddle as Deputy Chief Minister and Home Minister. It was, reportedly, at the insistence of both Prime Minister Modi and Home Minister Amit Shah.


Though reluctant, Fadnavis complied and set to work with characteristic discipline. His reward came soon enough. In 2023, Ajit Pawar broke ranks with his uncle Sharad Pawar and brought a faction of the NCP into the BJP-Shinde fold. Fadnavis became the face of the newly expanded ruling coalition. In the 2024 assembly elections, the Mahayuti (comprising the BJP, the Shinde-led Sena, and Ajit Pawar’s NCP) won a resounding victory, and Fadnavis returned to the Chief Minister’s office.


His return was poetic. In 2019, Fadnavis had ended his campaign quoting Atal Bihari Vajpayee: “I shall return.” At the time, his rivals had scoffed. They are not laughing now.


Fadnavis has reshaped Maharashtra’s developmental arc. He integrated big-city ambitions with rural anxieties, and brought a stability to statecraft rarely seen in India’s fractious states. His grip over party machinery, his ability to attract investment and his rapport with PM Modi have only strengthened over time.


Today, projects like the Nashik Kumbh Mela revamp, Shakti Peeth Highway, and continuous administrative meetings underscore the scale of his mandate. Maharashtra stands at the cusp of transformation and Fadnavis is its architect.


The big question is whether Mumbai is his final stop. Many in the BJP believe he is being groomed for something bigger. If he delivers over the next five years, the man once mocked for quoting Vajpayee may do more than just return. He may rise higher still. 

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