New Delhi: The Employees' Provident Fund Organisation's (EPFO) recent overhaul of its rules has triggered a wave of criticism from opposition parties, who allege that the changes penalize salaried individuals for the government's economic mismanagement. Opposition leaders have decried the new regulations as "draconian" and "cruel," urging Labour and Employment Minister Mansukh Mandaviya to immediately withdraw them.
The approved changes, decided upon at a meeting of the EPFO's Central Board of Trustees (CBT) chaired by Mandaviya, include extending the waiting period for final provident fund settlements from two months to twelve months of continuous unemployment, and for pension withdrawals, from two months to thirty-six months. A new rule also mandates that 25% of each member's contributions remain untouched as a “minimum balance” until retirement.
Congress MP Manickam Tagore voiced his concerns on X, accusing the government of "punishing pensioners and job-losers for needing their own savings". He pointed out that under the new rules, PF withdrawals are only possible after 12 months of unemployment instead of two, and pension can only be withdrawn after 36 months. Tagore further stated that 25% of EPF savings would be permanently locked, calling it a "robbery" of workers' savings and urging Prime Minister Narendra Modi to intervene.
Trinamool Congress MP Saket Gokhale went further, branding the changes as "open theft of salaried people's own money". He argued that individuals who lose their jobs and still have bills and EMIs to pay would be unable to access their own money for a full year and that even after that period, they could only access 75% of it if they remained unemployed. Gokhale suggested the reforms were a response to rising joblessness and were signs of a "panicked government trying to prevent a run on the EPFO".
Echoing this sentiment, Congress spokesperson Shama Mohamed described the rules as "looting the hard-earned money of the salaried middle class". She stated that the Modi government should immediately roll back these rules, emphasizing that 25% of the contributor's amount cannot be withdrawn and will remain locked until retirement and that the period for availing premature final EPF pension withdrawal has increased to 36 months, up from 2 months earlier.
The government, however, maintains that the changes are part of a broader modernization effort aimed at improving user convenience and long-term inclusion. Officials insist that retaining members in the system for longer will strengthen pension coverage and reduce premature withdrawals that weaken the fund's stability. The EPFO also states that the reforms, approved on October 13, aim to ensure long-term financial security for over 30 crore account holders.
The government's fact-checking unit, PIB Fact Check, has labeled claims of a permanent lock-in of 25% of EPF savings as "misleading," clarifying that it is a minimum balance rule, not a permanent lock-in, and full withdrawal is allowed after 12 months of unemployment or retirement.
Despite the government's clarification, critics argue that the new rules undermine financial security during emergencies and reflect the government's apprehension over rising unemployment. Concerns remain over the execution of the EPFO's digital revamp, with some fearing that a hasty transition could exacerbate existing technological lapses, grievance-handling delays, and data mismatches.
