The Employees' Provident Fund Organisation (EPFO) is drafting a universal provident fund scheme that will bring informal sector workers, gig‑economy participants and self‑employed individuals under its umbrella. The plan offers daily or annual contributions, full tax exemption and flexible withdrawal options, aiming to secure retirement savings for millions.

मुख्य बिंदु (Key Takeaways)

  • EPFO is designing a universal provident fund scheme.
  • Gig workers, self‑employed and informal sector employees will be eligible.
  • Daily/annual contributions, full tax exemption and flexible payout options are included.

The proposed framework mirrors the existing EPFO model but introduces several key enhancements. Prospective subscribers will be able to contribute on a daily, monthly or yearly basis, with the accumulated corpus earning an annual interest rate. Tax exemption is capped at ₹2.5 lakh, meaning both the contribution and the interest earned remain tax‑free.

International Benchmarks and Design Philosophy

To shape the scheme, EPFO has examined global examples, notably Singapore’s Central Provident Fund (CPF). Singapore’s self‑financing, flexible approach provides a template for a similar Indian model that relies entirely on individual contributions rather than fiscal subsidies.

Withdrawal Flexibility and New Options

On the withdrawal side, the agency plans to allow members to retain their corpus with EPFO even after retirement, a feature that could be extended to current members. A systematic withdrawal plan (SWP) will let retirees choose between front‑loaded or back‑ended payouts, giving them control over cash flow during retirement.

Self‑Financing Structure and Budgetary Impact

Unlike the PM Shram Yogi Maandhan Yojana, which involves a 50 % government co‑contribution, this scheme will be 100 % self‑financed. The move aligns with the Ministry of Labour’s broader objective to expand social security coverage beyond establishments with more than 20 employees.

Implications for the Gig Economy

If approved, a freelance consultant, ride‑share driver or small‑scale entrepreneur could formally earmark retirement savings through the new EPFO platform. This not only enhances individual financial security but also brings informal workers into a regulated data ecosystem, enabling better policy‑making in the future.