EPFO Pension Hike? Govt May Hike EPS Pension from ₹1,000 to ₹7,500
India’s ageing workforce may soon breathe a sigh of relief as discussions intensify around significantly increasing the minimum pension under the Employees’ Pension Scheme (EPS). Currently pegged at ₹1,000 per month, the minimum pension amount—unchanged since 2014—is facing strong pressure for revision from trade unions, pensioners’ associations, and now, a Parliamentary Standing Committee.
The ₹1,000 EPS Pension: A Long-Awaited Update?
The EPS, launched in 1995, has played a crucial role in providing post-retirement income to private sector employees enrolled under the Employees’ Provident Fund Organisation (EPFO). While the scheme assures a minimum pension of ₹1,000 (as revised in 2014), stakeholders argue that this amount is woefully inadequate in today’s economic climate.
A Parliamentary Standing Committee, chaired by BJP MP Basavaraj Bommai, has raised strong concerns over the stagnant pension levels, especially when juxtaposed with the soaring cost of living. The committee has made a recommendation to increase the minimum pension to ₹7,500 per month, citing inflation, rising medical costs, and social security needs for retirees.
Third-Party Evaluation Underway
For the first time in its 30-year history, the EPS is undergoing a third-party evaluation, following directives from the committee. The Labour Ministry has already floated a Request for Proposal (RFP) and confirmed that the review is currently in progress.
The panel insists that the evaluation be completed within a specific timeframe—preferably by the end of 2025—to enable informed policy changes. The report notes: “Considering the manifold increase in the cost of living since 2014, a serious revision of the pension amount is warranted.”
What Unions and Pensioners Demand
For years, pensioners’ associations and labour unions have campaigned for a hike in EPS payouts. Their demands vary, with some suggesting a floor of ₹3,000, others ₹5,000, and some pushing for ₹7,500 per month as the new minimum—especially for those who contributed to the fund for over 20 years.
The All India EPS-95 Pensioners’ Sangharsh Samiti and other such groups have held protests and submitted memorandums across several states, emphasizing that the current amount barely covers even the most basic necessities.
Labour Ministry’s Position and Roadblocks
In its submission to the panel, the Ministry of Labour acknowledged that a proposal to increase the minimum pension to ₹2,000 was floated as far back as 2020, but the Finance Ministry did not approve it at the time. Since then, the matter has remained dormant until recent pressure from the panel brought it back to center stage.
However, any move to increase EPS pensions would require significant budgetary support, potentially from the central government. Analysts suggest that a monthly pension of ₹7,500 for all eligible retirees could result in a major fiscal impact, possibly needing government subsidies or increased employer contributions.
Panel Urges “Urgency” in Reform
The parliamentary report doesn’t mince words: it recommends that the ministry treat the issue with “a sense of urgency.” With over 27 lakh pensioners depending on EPS benefits, the need for an enhanced pension is seen not only as an economic reform but as a social obligation to India’s elderly.
“The cost of living has increased manifold since the last revision. Medical costs, housing, and inflation in food prices make the current amount unsustainable for pensioners,” the report adds.
What Lies Ahead?
The next steps hinge on the completion of the ongoing third-party evaluation and the findings that come from it. Once that data is available, it could serve as the foundation for fresh proposals to the Finance Ministry in the next Union Budget cycle.
If implemented, a revised EPS pension could have far-reaching implications—enhancing the quality of life for millions of retirees and possibly acting as a precedent for other social welfare reforms.
Public Response
The move has already stirred optimism among beneficiaries and unions alike. Many have called it a “long-overdue correction”, while others remain cautious, waiting to see if the proposal converts into real policy change.
Some experts, however, urge a sustainable approach that ensures long-term viability of the pension fund, suggesting a tiered revision system based on contribution years and retirement age.
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