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Informist, Wednesday, Sept. 16, 2026

 

--Cabinet OKs raising wage cap to avail employees provident fund to INR 25,000 

--Cabinet OKs raising wage cap to avail employees' pension plan to INR 25,000 

--Govt to spend INR 113 bln more on new cap to avail employee provident fund

 

NEW DELHI – The Union Cabinet, chaired by Prime Minister Narendra Modi, Wednesday approved raising the threshold of monthly wages for mandatory coverage under the Employees' Provident Fund Scheme to INR 25,000 from INR 15,000 per month. The increase in wage ceiling will ensure that more individuals -- with monthly wage of up to INR 25,000 -- get mandatory social security coverage. Individuals with wages exceeding INR 25,000 per month can join the EPF voluntarily.

 

This will bring more than 5.1 million additional employees within the ambit of mandatory EPF coverage, significantly widening social security protection, Minister of Information and Broadcasting Ashwini Vaishnaw said. The increase will cost the government an additional INR 113.39 billion annually. The estimated expenditure over five years is approximately INR 566.96 billion, the government said in a release. 

 

The hike in the wage ceiling will expand access to provident fund savings, pension protection under the Employees' Pension Scheme, and insurance protection under the Employees' Deposit Linked Insurance Scheme, in accordance with the applicable scheme provisions.

 

The EPF wage ceiling remained unchanged throughout the decade from 2004 to 2014, before being enhanced to INR 15,000 in September 2014. The decision to further raise the ceiling to INR 25,000 reflects sustained wage growth, rising incomes, and continued expansion of formal employment over the intervening years.

 

The measure is expected to give a further impetus to formalisation of employment, worker retention, and long-term retirement security, the government said. "By bringing a larger number of employees automatically within the statutory social security framework, the decision strengthens the principle that formal employment should be accompanied by portable and assured social security protection," it said. For employers as well, wider social security coverage can support employee retention, workforce stability, morale, and the development of a more secure and future-ready workforce, it added. 

 

The Employees' Provident Fund Organisation currently operates one of the world's largest social security systems, administering the EPF, Employees' Pension Scheme, and Employees' Deposit Linked Insurance Scheme. Latest EPFO data show around 79.8 million contributing members across about 768,000 contributing establishments. The Employees' Pension Scheme provides pension benefits to around 8.2 million pensioners.  End

 

Reported by Priyasmita Dutta

Edited by Rajeev Pai

 

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