Will Government increase the Ceiling to 25,000/- under EPS&MP Act, 1952?

This is from the Pen of Sri G. Srinivasa Rao, A Senior EPS 95 Pension Analyst.
” Will Government increase the Ceiling to 25,000/- under EPS&MP Act, 1952?”

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The “Adhoc Committee” appointed by Chairman of CBT i.e., the Minister for Labour and Employment calculated 44,423/- as per the Consumer Price Index of 2021 i.e., 5.56%. Now this is 2026. Hence the Ceiling should be more than 50,000/- as per present Consumer Price Index.

It even suggested another alternative which involves revision every ten years whenever Pay Scales of Central Government employees are revised that the Ceiling should be three times of the Minimum Pay under the Scales. Hence the present Ceiling should be 54,000/- (18,000/- Minimum Basic Pay as per Seventh Central Pay Commission Pay Scales valid from 01-01-2016 to 31-12-2025). Thus even this Ceiling of 54,000/- is valid only upto 31-12-2025. If the Minimum Pay of Central Government employees is raised after merging D.A. in addition to adding Fixation Benefit in Eight Central Pay Commission Scales which are to commence from01-01-2026, the Minimum Pay may likely to raise to 32,000/-. Hence the Ceiling should be 96,000/- from 01-01-2026.

Goverment share of 1.16% on the present Ceiling of 15,000/- comes to 8,714.76 Cr as per the Annual Report of 2022-2023. If the Ceiling is raised to 25,000/-, Government has to shellout additionally 1.16% shore on extra 10,000/- i.e., 116/- at the Maximum on every member. Thus the Government share goes upto 14,524.60 Cr (15,000/8,714.76X25,000) i.e., 6,349.84 Crores extra if 2022-2023 year share is taken into account as example.

Government is literally depending on Private players for providing employment to exploding unemployed youth. It even introduced Incentives if provided additional employemet. In this connection will the Governement dare to ask to private players to shell out extra 1,200/-(12% of 10,000/-) in addition to 1,800/- (12% of 15,000/-)

If if the Ceiling is raised to 25,000/-, EPFO implement Pro-rata basis for calculation of Pension within the Ceiling.

Example: 16-11-1995 to 31-08-2014: 7,587 days: 6,500/25,550(70X365)X7,587=1,930/-*
(including Weightage of 2 years)
01-09-2014 to 31-03-2026: 15,000/840 (70X12)X139=2,482/-*
01-04-2016 to 31-03-2028: 25,000/70X2=714/-*
Total Pension within the Ceiling 1,930+2,482+714=5,126/-
The above calculation is taken assuming that Ceiling is going to be raised to 25,000/- w.e.f. 01-04-2026. And the date of attaining 58 years is taken as 31-03-2028 as an example)

The recovery towards Employees’ Provident Fund Scheme, 1952 is 12%. Whereas it is only 10% in case of Jute, Brick, Beedi, Coir, Gour Gum industries.

In this way the Government may prescribe two sets of Ceilings one for major and medimum industries and the other for small scale industries i.e., 25,000/- and 15,000/- respectively.

Government is finding it difficult to provide share of 1.16% inaddition to providing subsidy of approximately 900 Crores per annum to implement Minimum Pension of 1,000/- as claimed in Parliament umpteen times.

In this scenario will the Government raise the Ceiling which involves burdending the Private industries on which Government is heavily depending for providing employment to exploding educated youth? We have to wait and see.

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