With millions dependent on it, EPFO must reform to perform


Dr Srinath Sridharan

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Dr Srinath Sridharan

5 reads

The Indian government must urgently revamp the Employees' Provident Fund Organisation (EPFO) to transform it into a world-class, digital-first entity. The future of Indian retirees depends on it.

February 26, 2024


Key Takeaways

  • With over a third of final settlement claims being rejected by the EPFO, the organisation’s functioning is now in sharp focus
  • Users complain its processes are cumbersome and its technology is unreliable and antiquated
  • Since India lacks alternative pension solutions, the need to reform the EPFO is of utmost importance
  • This extends to everything from a tech overhaul to better governance, transparency, and simplifying processes

With over 277 million accounts and a corpus of nearly Rs 20,00,000 crore, India’s Employees' Provident Fund Organisation (EPFO) is the world’s largest social security organisation. However, while its sheer scale may be impressive, its efficiency is decidedly less so.

Numerous subscribers have voiced their grievances, particularly regarding delays in claim settlements and the cumbersome processes involved. Instances of claims being returned due to minor discrepancies such as a single alphabet mismatch or differences between EPF and Aadhaar details are unacceptable. These issues not only cause frustration but also create financial hardships for EPF subscribers.

Worryingly, these problems only seem to be getting worse with each passing year. In 2022-23, for instance, the rejection rate for final settlement claims stood just shy of 34%, meaning one in every three claims made by EPF members was shot down. While this is a marginal improvement from the year prior, where the rejection rate stood at 35.2%, it’s up over 2.5X from the 2017-18 rejection rate (12.9%) from 2017-18.

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