The decision by the government to rescind the restriction on withdrawals from employee provident fund before the age of 58 finally puts an end to any controversy surrounding this fund. It started in March when Finance Minister Arun Jaitley announced a tax on withdrawal of the employee provident fund (EPF). That was withdrawn due to protests across the country. Then the government put a restriction on the withdrawal of the money before the age of 58. This was unjust.
The government claims that this rule was put in place to protect people’s money, but this excuse is farcical. For the private sector employee, the government exists as a tax and fee collector. There is no financial obligation to take care of an employee if one loses their jobs, nor are there any other benefits provided by the government. So, why is there any need for the government to restrict the withdrawal on the provident fund, which in some people’s cases is the only fund they have when they are laid off or retire. If the government is so keen on helping people post retirement then there are better things to do, like improving health care or even encouraging people to invest more money by easing off on other indirect taxes.
The government has thankfully seen the light, but not before trade unions and others threatened to rise up against them. Perhaps, this will set an example for the finance ministry, when they next think of controlling how the public uses their own money.
