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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 Vanishing Voter

Jan 28
4 min read

India’s voter-roll revision promises accuracy, but the Opposition reads routine hygiene as authoritarian design.

The Uttar Pradesh government’s sweeping revision of electoral rolls has revealed an uncomfortable truth: a vast population of ghost voters had long been lurking in the system. The final draft of the Special Intensive Revision (SIR) has deleted about 19 per cent of names, meaning that on paper, every fifth voter no longer exists. Many of these deletions reflect deaths or migration. But to dismiss them all as ‘bogus’ – as the Opposition shrilly alleges - is to oversimplify a more troubling reality. Nor is this an Uttar Pradesh-centric anomaly. In West Bengal, nearly 9 per cent of names have been removed while in Rajasthan, roughly 8 per cent.


Indian politics, however, thrives less on data than on distrust. As news of this one-fifth evaporation broke, opposition parties accused the Election Commission and the Union government of foul play. The debate quickly shifted from why ‘dead’ or ‘migrated’ names had lingered for years to who stood to gain from their removal. That pivot exposes a deeper question for India’s political class: do parties genuinely want clean electoral rolls or merely a curated electorate?


Trading Accusations

Samajwadi Party president Akhilesh Yadav has labelled the SIR undemocratic and unconstitutional. In his telling, it is a backdoor version of the National Register of Citizens (NRC), using the Election Commission to do what should, if attempted at all, fall transparently under the Home Ministry. His case blends legal argument with political narrative. From demonetisation to vaccination queues and now document-heavy verification drives, Yadav paints a picture of a government that repeatedly forces citizens to “stand in line” and placing their rights and even their citizenship under perpetual suspicion.


The response from the ruling side has been predictable. Uttar Pradesh minister Jaiveer Singh dismissed the allegations as baseless and malicious, even crediting Samajwadi Party workers for assisting the SIR on the ground. If opposition cadres have indeed facilitated a process their leaders publicly condemn, it suggests a measure of political double-speak. It also raises a sharper question: if the SIR is fundamentally anti-democratic, why did opposition workers participate at all? Cabinet minister Om Prakash Rajbhar waved away the controversy as the sour grapes of habitual losers.


Beneath the partisan din lie two substantive anxieties. First, as Samajwadi Party spokesperson Manoj Kaka argues, if a disproportionate share of deletions has occurred in constituencies where the BJP won by large margins, it is fair to ask whether past victories rested partly on bloated rolls. Second, the case of Congress leader Gurdeep Singh Sappal shows how even informed, well-connected citizens can vanish from the registry. His name was struck off after he moved from Sahibabad to Noida, because the system does not automatically transfer voters across constituencies. If this can happen to him, the vulnerability of migrant workers, tenants and residents of informal settlements is easy to imagine.


The official breakdown of deletions offers scale, if not reassurance. According to R. Rinwa, Uttar Pradesh’s additional chief electoral officer, 46.23 lakh voters (about 2.99 per cent of the previous roll) were found to be deceased. Another 2.57 crore voters, or 14.06 per cent, had either permanently shifted from their registered address or could not be traced during verification. A further 25.47 lakh names were removed because voters were registered in more than one location.


District-level data shows striking variation. Lucknow leads the list, with around 12 lakh deletions, roughly 30 per cent of its electorate. Ghaziabad follows with 8.18 lakh names struck off, about 28 per cent. At the other end, Lalitpur recorded the lowest proportion, with fewer than 10 per cent of voters removed, while Hamirpur saw about 11 per cent deleted.


Elsewhere, the friction continues. In West Bengal, tensions between the Trinamool Congress and the Election Commission have reached the Supreme Court, which has directed the public disclosure of the names of 1.25 crore voters affected by deletions.


Restoring Trust

The problem of ghost and migrated voters is not confined to Uttar Pradesh. In the draft lists released during the second phase of revisions across 11 states and Union territories, a total of 3.69 crore names have been deleted. West Bengal alone accounted for 58 lakh removals; Rajasthan for 42 lakh. Earlier, Bihar’s SIR had already cut 65 lakh names.


When one-fifth of an electoral roll disappears, two questions demand answers. Who benefited for years from those phantom voters? And who now risks wrongful exclusion? The Election Commission’s one-month correction window is a necessary step, but it will matter only if it reaches every voter through simple, intimidation-free procedures.


The true test of the SIR lies not in its stated intent, but in its execution. Branding it a conspiracy is as shallow as declaring it flawless. The electoral roll is the republic’s registry of trust. If the exercise has exorcised genuine ghosts, it only strengthens democracy. The real measure will be whether the next roll banishes both the lingering phantoms and the wrongly erased, thereby protecting the vote through process rather than political theatre.

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