Home > Business > FinMin rejects Workers’ Bank proposal by EPFO

FinMin rejects Workers’ Bank proposal by EPFO

 PTI |  2016-07-21 23:00:40.0  |  New Delhi

FinMin rejects Workers’ Bank proposal by EPFO

The Ministry of Finance has rejected a proposal for setting up a Workers’ Bank by Employees’ Provident Fund Organisation( EPFO), according to a senior official of the Labour Ministry. Earlier, the EPFO had sent proposals to the Finance Ministry seeking permission to start a bank to serve its members. The EPFO, which has about 3.7 crore subscribers, wanted to set up a bank and the proposal was discussed in the Central Board of Trustees’ (CBT) meeting on December 19, 2014.

CBT is the apex decision making body of EPFO. “The bank proposal was rejected by the Ministry of Finance. They are of the opinion that we do not have necessary competence for running a bank. Some internal discussions are going on in the Ministry. We are trying to come up with answers to satisfy Finance Ministry’s queries,” the official said on condition of anonymity. The core idea of setting up the bank is not to make huge profits, but to serve our own members primarily, the official said. 

Another senior official of the EPFO said currently it manages funds to the tune of Rs 7.5 lakh crore and another Rs 2.5 lakh crore will be with the organisations of companies who were exempted to deposit PF with EPFO. 

Then Labour Secretary Gauri Kumar had earlier said EPFO might not have the core competence to run a Workers’ Bank. However, the suggestions for such bank can be referred for consideration of Department of Financial Services based on discussions in CBT. 

Labour Minister Bandaru Dattatreya had earlier said a committee in CBT is examining the issue to come up with suggestions. Meanwhile,  job creation in labour-intensive and export-oriented sectors, including textiles, automobiles, IT/BPO, declined 67.93 per cent in 2015, with net addition of employment coming down to 1.35 lakh during the year, Parliament was informed. “According to Labour Bureau’s Quarterly Quick Employment Survey (QES), estimated employment experienced a net addition of 4.21 lakh (persons) and 1.35 lakh (persons)... in January 2014 to December 2014, and January 2015 to December 2015, respectively,” Commerce and Industry Minister Nirmala Sitharaman said in a written reply in the Rajya Sabha. 

The estimated employment for export-oriented sector saw a net addition of 1.22 lakh persons in January-December 2015, she added. The Labour Bureau conducts quarterly QES in select labour-intensive and export-oriented sectors such as textiles, including apparel, metals, gems and jewellery; automobiles; transport; IT/BPO; leather and handloom/powerloom to assess the effect of economic slowdown on employment in India. 

Investors’ darlings Tamil nadu, karnataka have highest number of bonded labourers
Despite several attempts to eliminate the practice of bonded labour, the country is witnessing a huge surge in numbers of forced labour system. According to the latest government data, there are 2,82,429 bonded labourers in the country, which have been released and rehabilitated. With 65,573 ‘caged’ workers, Tamil Nadu has emerged at the top among the 18 bonded labour prone states, while Uttarakhand, which is a Congress-ruled state, is at the bottom with just five such labours in the state. “The instances of prevalence of forced and bonded labour system are noticed now and then even after its abolition by law with effect from October 25, 1975. The reasons are spelt out exhaustively at Section 2(g) of the Bonded Labour System (Abolition) Act, 1976. The root of the problem lies in the social customs and economic compulsions and they are yet to change in the desired direction,” said Minister of State (IC) for Labour and Employment Bandaru Dattatreya in reply to a question in Rajya Sabha on Wednesday. 

Other states where bonded labour is being practiced in full swing include Karnataka where 58,348 workers were forced to work, followed by Odisha where 47,313 bonded laboured were freed from the clutches of contactors and rehabilitated. The violation of labour law was also rampant in Samajwadi Party-ruled Uttar Pradesh as 37,788 bonded labours have been freed, while 31,687 bonded labours were identified in Andhra Pradesh during regular raids at kilns, shops and other destinations. Bihar has 14,577 bonded labour, while just 64 forced workers were recovered from the home state of Prime Minister Narendra Modi. Madhya Pradesh has 12,392 such workers, while Maharashtra has 1,325 bonded labour, who have been rehabilitated. Surprisingly, 2,992 bonded labours have been identified and released from Arunachal Pradesh. 

Share it
Top