Report No. 32 of 2013 - Performance Audit of Employees' Provident Fund Organisation of Union Government (Civil), Autonomous Bodies, Ministry of Labour and Employment

Date on which Report Tabled:
Tue 18 Feb, 2014
Date of sending the report to Government:
Government Type:
Union Department
Sector Social Welfare


The Government of India has enacted a number of legislations in the area of social security. Employees Provident Funds and Miscellaneous Provisions Act, 1952 is an important Act in this regard. The Act provides for compulsory provident fund, pension and deposit linked insurance in factories or establishments employing twenty or more employees in industries mentioned in Schedule I to the Act. The Government of India administers the Act through Employees Provident Fund Organisation.

Wage limit for coverage of employees under EPF Scheme was RS 6500 which has been continuing since June 2001. There were consistent shortfalls in receipt of contributions from the Central Government. Income of EPFO collected by way of administrative charges, etc. has been more than its expenditure on running of schemes. The balance in the 'Interest Suspense Account' increased consistently from RS 12445.29 crore in March 2007 to RS 22461.15 crore in March 2011. The EPFO did not follow prescribed pattern of investments. Valuation of Employees Pension Fund is not being done in time, nor are the reports received in a time bound manner and there is significant delay in action on valuation reports.

The EPFO was not very encouraging towards voluntary coverage of its schemes. Inspections of establishments were less than prescribed targets, which led to insufficient controls over establishments. A sum of RS 313.20 crore was recoverable on account of EPF arrears from 20974 establishments in selected ROs/SROs of the five States as on 31 March 2012. Outstandings towards realisation of damages from unexempted establishments increased from RS 151.78 crore to RS 265.75 crore during 2006-07 to 2011-12. Employers of exempted establishments did not deposit RS 129.20 crore to their respective Boards of Trustees. An amount of RS 299.78 crore was not invested by the BOTs of 249 exempted establishments which was in violation of the provisions of exemption.

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