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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Appropriation of EPF to welfare fund: Comment on Government's move to appropriate unclaimed employee provident fund balances to a welfare fund.
Aug 01, 2016 Related to : GS Paper-3

Ans :


Earlier Central government has decided to appropriate unclaimed employee provident fund balances to a welfare fund. To implement the decision recently central government has released the rules for creation of Senior Citizens Welfare Fund, which will have funds from unclaimed deposits for seven years in small savings schemes including Post Office Savings Accounts, Public Provident Fund and Employees’ Provident Fund within one year.

Is it fair move?

  • Since from many years about Rs 42,000 crore lying in inoperative accounts of EPF and other saving accounts of employee.
  • In India about 10.5 crore senior citizens are in dire need of social security and diverting unclaimed money from employee fund will serve good purpose of creating social security for senior citizens.
  • But many workers union have objected any such move of diverting employee money to other government schemes. They argue that the government has no right to encroach on worker’s money.
  • Creating welfare fund for senior citizens is good move, but the logic for funding this by appropriating provident fund balances, which mainly represent the retirement savings of low-income workers, is not in the interest of the employees.
  • Similarly EPF is a long-term retirement vehicle, and a seven-year time bar on claims from it, is too short. Hence such move will affect the long term interest of employees.
  • With the bulk of the EPF money already channelled into government and public sector bonds, the argument that the unclaimed balances are unproductive is not acceptable.


  • Any move by the government to appropriate EPF balances must ideally take the fund’s board of trustees into confidence and entail a public consultation process.
  • The government should not attempt to tinker with the EPF rules create avoidable confusion among employees, because it is their default retirement vehicle.


Creating welfare fund for senior citizens and using unproductive fund for developmental activities is welcome move, but it should not be affect the interest of those who invested in it. In this background worries of workers and unions are valid. Hence can utilise these money through debt instruments, but it should not appropriate it by diverting to other schemes.

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