A flood of EPF withdrawals during COVID lockdown, reveals govt data

A flood of EPF withdrawals during COVID lockdown, reveals govt data

Registered employees from across India have withdrawn about ₹40,000 crore from their respective Employee Provident Fund (EPF) accounts during the lockdown, reveals data by the Ministry of Labour and Employment. Union minister Santosh Kumar Gangawar provided the information in a written reply in the Lok Sabha.

An amount of about ₹39,402 crore was withdrawn from the Employees’ Provident Fund accounts from March 25 to August 31, said the ministry. The ministry did not provide any information on the overall number of applicants.

More than 70 per cent of the amount was withdrawn from just seven states — Telangana, Haryana, Gujarat Maharashtra, Karnataka and Tamil Nadu and Delhi. Ironically, the seven states have seen a surge in COVID-19 cases.

State-wise, Maharashtra withdrew the highest amount – ₹7,837 crore within the last five months. Karnataka stood second with the withdrawal of ₹5,743 crore followed by Tamil Nadu where employees took out about ₹4,984 crore from EPF accounts. These three states accounted for almost half of the total withdrawals during the lockdown.

Many of these applications were mid-term withdrawal applications, informed one of the officials from the Provident Fund office. Usually, the EPF amount can’t be withdrawn while the person is employed. However, partial withdrawal is allowed in case of medical emergencies, property purchases or educational purposes.

“The department saw a flood of these applications after the pandemic began. Many of the people had medical reasons and were out of cash to treat their family members. A lot of applications were sanctioned accordingly,” said Dhananjay Mohite, secretary at EPFO commissioner office, Pune.

The national capital Delhi recorded the withdrawal of ₹2,940 crore amid lockdown.

Here are two instances of how the cash-starved and needy employees have taken the EPF route to get some help:

Narendra Deshpande, an IT employee who was based in Hyderabad, had to withdraw the EPF money when he began facing a cash crunch amid the lockdown. “My salary was cut by a huge amount which hugely affected my monthly expenses. So, I had no choice.” He said in normal circumstances, he could have asked his friends or relatives to help, “but COVID took away everyone’s money.”

Dhananjay Potdukhe, who works as an accountant in Pune, is another applicant who withdrew his EPF money for medical reasons. “My father was suffering from a medical condition related to the heart and I was running from pillar to post to find him a hospital bed and arrange money for his treatment. When I could not manage much of the amount, I had to dip into my EPF savings.” He paid the hospital bills.

And there are many such examples where people withdrew their EPF money in order to manage their daily finances as well as medical expenses. The ministry did not reveal the number of applications or employees who opted for this option.

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