Editorial

Published: Mar 15, 2022
Updated: Mar 15, 2022

Robbing retirees of PF comfort

Even as the disruptive impact of the Covid-19 pandemic on the Indian economy and common Indian lives continues, an insensitive government has administered a harsh blow to 60 million salaried employees by slashing the interest rate on their provident fund to 8.1 per cent, the lowest level in the last 43 years! People have realised that the government’s economic policies are being framed in such a way as to make the rich richer while emasculating even more those at the bottom of the economic ladder. But no salaried person could ever have imagined that the government would take a draconian step like slashing the interest rate on retirement funds – one of the few hedges of the lower and even middle classes against the rising cost of living.

It is common knowledge that whether they like it or not, salaried employees are the only class that regularly pays taxes to the exchequer. Neither can they have to evade doing so, unlike other classes of taxpayers like professionals and businessmen who can resort to a multiplicity of tax-saving as well as evading methods not available to the salaried class. Despite their being a bulwark of the exchequer, the government has thought it fit to slash the interest rate on the employee’s provident fund from 8.5 per cent to 8.1 per cent – a cruel blow, especially in these times!

And coming when it does, the step is nothing short of inhuman as the monster of inflation has been raising its ugly head, making it literally a tightrope walk for low- and middle-income people to balance their personal budgets and manage to live reasonably comfortably. What is more, the government has gone step ahead and cut the rate of the retirement funds after salaried employees become senior citizens.

As if this is not enough, the government has imposed a tax on provident fund contributions exceeding Rs 2.50 lakh (Rs 5 lakh in the case of government employees).

This double blow – imposition of tax on PF contributions exceeding Rs 2.5 lakh and a reduction in the interest rate — will make the lives of retired employees all the more miserable as rising inflation has already made it difficult for the majority of such cases to make ends meet. No civilised country will or should think of such inhuman measures that deny senior citizens a chance to live out the last phase of their lives peacefully with a measure of financial security. Isn’t the government capable of raising the revenues which it hopes to get by slashing the PF interest rate from other avenues, rather than deprive honest, tax-paying senior citizens of a reasonably comfortable retired life?

It is common knowledge that the cost of healthcare has gone way beyond the means of the middle class, not to speak of retirees. Post retirement, the regular income of salaried employees comes to an end and they have to manage in the evening of their lives on the little eggnest called provident fund which they had dutifully contributed to throughout their working lives. No government that truly considers itself as working for the welfare of its people, especially the lower- and middle- income groups, would or should take such a cruel and insensitive step. The Modi government should introspect and immediately withdraw these anticitizen measures if it wants to be genuinely regarded as working for the welfare of the Indian people.