Pradeep Singh

The current financial anxiety is seen as a direct byproduct of the COVID-19 pandemic. The virus has created uncertainty on several fronts both for individuals and businesses. People are in distress and have put their heads in the sand about their financial future.

To lessen the COVID-19 impact and mitigate the crisis and chaos situation, Finance Minister Nirmala Sitharaman had on March 26, announced a package of 1.70 lakh crore to help PF account holders facing economic crisis during Covid-19.

Under the new package - Pradhan Mantri Garib Kalyan Yojana- a new sub-para (3) was added to Para 68L of the EPF Scheme, 1952, allowing the PF account holders to withdraw money equal to 75 per cent of the account amount or three months dearness allowance (whichever is less). The account holders were exempted from re-crediting the account after withdrawing money.

Meanwhile, this led to a rise in the withdrawal of money from the PF accounts. According to the Employees Provident Fund Organisation (EPFO) of the Ministry of Labour, about 13 lakh account holders have availed this facility so far as Rs 4,684.52 crore has already been paid on claims.

According to the Ministry of Labour and Employment, the number of withdrawals from exempted PF trusts has also increased. According to the data on April 27, a total of 79,743 exempted PF trust account holders withdrew Rs 875.52 crore from the accounts.

Moreover, 54,641 account holders of 222 private establishments withdrew Rs 338.23 crore, while 24,178 beneficiaries of 76 public sector establishments withdrew Rs 524.75 crore from their accounts, reported a news agency.

On the other hand, an RTI report obtained by activist Saket Gokhale claimed that Indian banks technically wrote off Rs 68,607 crore due from 50 top wilful defaulters. The RBI said that Rs 68,607 crore comprising outstanding and the amounts technically/ prudentially written off till September 30, 2019, said an IANS report.

However, soon after the report, Congress slammed the government for writing off loans. Congress chief spokesperson Randeep Surjewala charged the BJP with helping the defaulters and said, "Till April 24, Rs 68,607 crore have been written off by the government. The Prime Minister cannot evade this question by keeping silent."

"As much as Rs 8,048 crore have been written off of Mahul Choksi and Nirav Modi. Another diamond merchant Jatin Mehta's Rs 6,048 crore too have been written off, and so is the case with Kingfisher's Vijay Mallya. Similar is the case with the relations of these defaulters," said Surjewala.

Targeting the government on freezing the Dearness Allowance (DA), the Congress said such write-offs have come to light at a time when DA of the Central government employees and the Army personnel has been freezed citing COVID-19 impact.

The party further alleged that in the last five and a half years, the government had written off Rs 5.10 lakh crore of the default money till September 2019.

However, the ruling-BJP later clarified that there is no cut in DA and dearness relief (DR), and the additional hike over 17% currently paid will be reinstated prospectively, effective Jan 2020.

“There is no cut in DA and DR. It’s a temporary HOLD on the additional HIKE, which will be reinstated. DA and DR at the current rate, the highest ever rate at 17% brought by the Modi government, will continue to be paid,” the ruling-BJP said in a tweet.

“When the government decides to release the instalments of DA and DR from 1 July 2021, the effective rates from January 2020, July 2020 and January 2021 will be restored prospectively and will be subsumed in the cumulative revised rate effective from 1 July 2021,” the party added.