At its upcoming meeting on July 8, the central board of the Employee Provident Fund Organisation (EPFO) may explore the opportunity of framing a universal pension scheme for people not yet covered by the retirement fund. According to the sources, a separate scheme that would provide PF and pension benefits for gig and platform workers is possible to be taken up at the meeting to be held in Bengaluru.

The labor codes passed by the Parliament in 2020 had provided that government would come up with a social security scheme for gig workers. An internal committee of the EPFO had prepared a case for the introduction of a universal pension scheme given Prime Minister Narendra Modi’s call to provide universal social security catering to those not covered under the Employee Pension Scheme, 1995. While there has been a demand for increasing the monthly pension payout under EPS 1995, the EPFO is currently finding it difficult to provide a minimum pension of ₹3,000 per month given the low contribution to EPS by EPF. Under EPF, an employee pays 12 percent of his basic wage and some allowances as statutory deductions. A matching amount is contributed by the employer, out of which 8.33 percent goes to EPS. According to the report ‘India’s Booming Gig and Platform Economy’ released by NITI Aayog on Monday the gig and platform firms need to adopt policies that offer old age/retirement plans and benefits and other insurance covers for contingencies such as injury arising from work that may lead to loss of employment and income. Such policies may be uniquely designed by a firm, in partnership with insurance companies, or could be designed and offered in collaboration with the government, as envisaged under the Code of Social Security, 2020.

India has a huge unorganized or informal sector, around 83 percent of the workers are in informal employment where there is no formal employer-employee relationship. It can be recalled that pension regulator PFRDA had a few years back mooted an auto-enrolment scheme for increasing pension coverage in India.