Financial Daily from THE HINDU group of publications
Wednesday, Jul 09, 2003
Corporate - Trends
Industry & Economy - Small Savings
PF defaulters face blacklisting
NEW DELHI, July 8
THE Union Labour Ministry on Tuesday launched a major offensive against all companies that have defaulted in paying their provident fund dues as part of its `Compliance 2004' programme.
According to the Ministry's plans, all provident fund defaulters will be given a month's time to clear their dues failing which, all the nodal Ministries will be asked to blacklist the defaulting companies. Simultaneously, banks and financial institutions will also be instructed to freeze their respective credit facilities.
Announcing the move, the Labour Minister, Mr Sahib Singh Verma, said the `Compliance 2004' programme would include attachment of property and bank accounts of defaulters, launch of prosecution proceedings in criminal courts, arrest of defaulters and appointment of receivers.
As of now, the Employees Provident Fund Organisation (EPFO) has arrears totalling Rs 1,511 crore.
Mr Verma said the multi-pronged campaign would target defaulting establishments, including exempted ones, which had misappropriated workers' dues or had failed to pay them their money and meet legal obligations voluntarily.
``The overarching objective of this programme is to ensure that every rupee due to the worker under EPF Act is recovered from employers and deposited into workers' respective accounts,'' he said.
The Minister also expressed optimism that with the timely completion of business process re-engineering (BPR) of EPFO and increased recovery of arrears, the organisation could possibly maintain a 9.5 per cent rate of return on PF deposits.
``May be next year too, we will be able to maintain 9.5 per cent interest,'' Mr Verma said, and added that once the BPR was complete, the accounts would be credited instantaneously which could save up to Rs 100 crore annually in interest income by avoiding delays.
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