India Extends Retirement Security to 5.1 Million More Workers

India has widened mandatory workplace social security to more than 5.1 million additional employees by raising the monthly wage ceiling for Employees’ Provident Fund Organisation coverage from ₹15,000 to ₹25,000. The Union Cabinet approved the first update to the threshold since 2014, bringing many workers whose pay had risen beyond the old limit within the scope of automatic protection.

Employees in covered establishments who earn within the newly included ₹15,000 to ₹25,000 band will gain access, subject to scheme rules, to provident fund savings, pension benefits and insurance linked to fund membership. Under the revised ceiling, employees and employers will each contribute 12 percent of wages up to ₹25,000. The central government will continue contributing 1.16 percent toward pensions.

The adjustment reflects how far wages and living costs have moved since the ceiling was last set 12 years ago. Government figures put average pay for a regular salaried employee at about ₹23,000, while minimum wages in several states have exceeded the former ceiling.

The wider safety net comes with a near-term tradeoff: affected employees may see lower take-home pay because more is directed into provident fund savings, while employers face higher contributions. The government expects annual support for the system to rise by ₹1,089 crore, to about ₹11,339 crore. India’s EPFO already has roughly 79.8 million contributing members across 768,000 establishments.