Lockdown-stricken Malayalis dip their hands into EPF accounts

KOCHI: Left with a Hobson’s choice during the lockdown, Malayalis have been knocking on the doors of Employee Provident Fund Organisation (EPFO) offices in Kerala to tide over the financial crunch faced by them. Over Rs 78 crore was withdrawn from EPF accounts by people in Kerala in April alone to overcome the economic crisis.

Officials of the organisation said the withdrawal was mainly utilising a special provision announced by the Centre enabling employees to withdraw money from their EPF accounts to tide over financial difficulties during lockdown announced in the wake of Covid-19 outbreak in the country.  As per the official data, Rs 78.49 crore was disbursed from the offices of the EPFO in Kerala which received 2,3271 Covid-19-specific fund withdrawal applications in the month of April 2020.

“Ever since the government announced the scheme for withdrawal of 75 per cent of the total amount in the account or an amount equivalent to three months’ salary, whichever is lower, to help employees tide over financial crisis, we have been receiving a steady number of applications. The regional offices have been able to process the applications in a speedy manner to disburse the amount,” said a senior EPF commissioner.

Officials said withdrawals are being requested for by employees of not only smaller firms but also major companies in the state. “It’s a fact that there is a fund crunch in the market. People are opting for all means to raise some money to tide over the crisis induced by pandemic and that’s why they have touched their EPF accounts also. People are all struggling to stay afloat and it will take another five to six months for the economy to get back on track,” said Irudaya Rajan S of the Centre for Development Studies (CDS). 

“Income loss is a fact and people have been forced to avail fund from all available sources till the situation gets back to normal,” he added. A senior EPF official said, generally, employees do not touch their EPF accounts except for reasons like higher education and marriage of their children and treatment of family members. “We never expected such a huge number of applications in this short period and the number of applications is likely to go up further in the coming days,” the official added.