Union finance minister Nirmala Sitharaman on Wednesday announced the statutory provident fund or PF contribution of both employer and employee will be reduced to 10% each from existing 12% each for all establishments covered by EPFO for the next three months.
Nirmala Sitharaman was addressing a press conference to give the details of the Rs 20 lakh crore economic stimulus package announced by Prime Minister Narendra Modi a day earlier.
In order to provide more take-home salary for employees and to give relief to employers in payment of PF dues, she said, the EPF contribution is being reduced for businesses and workers for three months, amounting to liquidity support of Rs 6750 crore.
The Central Public Sector Enterprises (CPSEs) and state public sector undertakings (PSUs) will, however, continue to contribute 12% as an employer contribution.
This scheme will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan package and its extension, she said.
This will provide relief to about 6.5 lakh establishments covered under EPFO and about 4.3 crore such employees