The Central government is looking to make the Employees’ Provident Fund (EPF) exit as easy as online transactions via UPI or cash transactions at bank ATMs, which would give a boost to access to retirement savings for millions of salary earners.
The new changes will rationalize EPFO’s operations by making them part of the Indian payments ecosystem so that its subscriber members can now access their eligible withdrawals via UPI linked platforms and ATM style transactions. Through the scheme it is hoped that there will be a decrease in paperwork, a faster processing time and the elimination of many of the administrative obstacles involved in an EPF withdrawal.
The implementation of the plan has been welcomed by experts as a significant step towards digital governance and public services that are citizens-oriented. The changes are aimed at enabling withdrawal of provident fund savings for “true emergencies” like medical expenses, paying up the house loan and other financial crises, they believe.
Lokanath Panda, COO of BLS E-Services, has called the initiative a big step towards the modernisation of today’s India’s social security system. He said that using digital payment infrastructure would also make the user experience more user-friendly, and would ensure faster processing of legitimate claims.
However, the reforms were backed by a specialist, who said that it is not about sacrificing the main objective of a long-term retirement plan, but rather it is about making the system more subscriber-friendly.
But experts have also cautioned against it. They said while easy access to EPF funds provides greater financial flexibility, the subscribers should not make any unnecessary withdrawal which may impact the corpus for the entire retirement period. They highlighted the fact that the objective of provident fund is for financial security after retirement and this fund should be used in the period of genuine emergency primarily.
With the required technological integration, the government is likely to roll out detailed guidelines on the implementation, bringing it one more step towards further augmenting the Digital Public Services and for EPFO to become more efficient to operate across the country.