Pension in the unorganized sector
The situation of workers and self-employed in other sectors is far worse than that of the very small minority of government employees. Organized workers are generally believed to have the potential to receive at least some of these better pensions. This includes public sector workers, including Navratna companies, and private companies with more than 20 employees. Less than 10% of the workforce is in the organized sector. The pension scheme for Employees in the Organized Sector is Employees Provident Fund Organization (EPFO) scheme launched in 1995. Given the deplorable state of the EPF pension, it is clear that even workers in the organized sector in India will soon be pushed below the poverty line once they retire. The employer is required to pay 8.33 per cent of the employee's salary and the central government 1.66 per cent to the pension fund. There is a deception behind the attractive provision that the employer and the government should pay 9.49 per cent of their salary into the pension fund.
The trap is that the upper limit of the employees' pensionable monthly salary has been fixed at just Rs 15,000. Until 2014, the maximum salary limit was Rs 6,500 !. See how far the Indian government is protecting the interests of capitalist. How shameful is it that the government itself dictates that no matter how big the employer is, it should contribute a meager and utterly insufficient amount to the employee's pension fund. Such a system can be seen only in our country. Previously, the EPF Act provided for a better pension if workers and employers by mutual consent contributing to the pension fund in proportion to their full salary. However, in 2014, the EPFO unilaterally removed this provision by an amendment. The High Courts, including in Kerala, quashed the EPFO's amendment on the complaint of the workers. The appeal filed by EPFO was rejected by the Supreme Court. Yet the authorities were unwilling to grant a better pension in the spirit of the law and court rulings passed by Parliament. Instead, the Central Government has filed a review petition directly in the Supreme Court. The Supreme Court has decided to leave the pension case to a three-member bench.
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