₹48,075.75 Crore in Relief: Unpacking EPFO’s Non-Refundable Withdrawals During Covid-19

During the Covid-19 pandemic, the Employees’ Provident Fund Organisation (EPFO) in India provided a crucial financial relief measure to its members by introducing a special window for non-refundable withdrawals. This was a response to the economic challenges brought about by the pandemic, aiming to alleviate financial strains for millions.

Key Data and Insights:

1. Magnitude of Withdrawals:
   • Over 22 million EPFO subscribers, which constitutes more than a third of the total, availed themselves of this non-refundable withdrawal option.
   • The total amount disbursed was ₹48,075.75 crore over three financial years​​​​.
2. Yearly Financial Impact:
   • In 2020-21: ₹17,106.17 crore was disbursed, benefiting 6.92 million subscribers.
   • In 2021-22: Withdrawals increased to ₹19,126.29 crore, aiding 9.16 million subscribers.
   • In 2022-23: ₹11,843.23 crore was disbursed, benefiting 6.20 million subscribers​​.
3. EPFO’s Capacity:
   • EPFO manages the retirement savings of approximately 60 million subscribers, overseeing a corpus of around ₹18 lakh crore​​.
4. Government Intervention:
   • The Indian government amended the EPF Scheme, 1952, to allow these non-refundable withdrawals.
   • Members could withdraw an amount equivalent to their basic wages and dearness allowance for three months or up to 75% of the amount in their EPF account, whichever was less​​.
5. Implementation and Response:
   • The facility was implemented from March 28, 2020. Initially, 33 beneficiaries withdrew ₹6 lakh in the first four days.
   • Claims were expedited, with the majority being settled within three days, minimizing the financial shock on households during the pandemic​​.
6. Extension of Facility:
   • The EPFO extended the withdrawal facility in March 2021, allowing a second round of withdrawals from the PF corpus​​.
7. Decision-Making Process:
   • The central board of trustees of the EPFO, a tripartite body chaired by the labor minister, is the apex decision-making body for such initiatives.
   • All EPFO reports require approval from this board before formal acceptance by the government​​.

This initiative by the EPFO during the Covid-19 pandemic played a significant role in providing financial relief to its members, especially those with lower wages. The timely disbursement of funds and the government’s amendment to the EPF Scheme were pivotal in assisting millions of subscribers during these challenging times.