Labour Minister Bandaru Dattatreya on Tuesday said that the government’s intention behind announcing a tax on withdrawal of Employees’ Provident Fund savings was to offer better returns on investments in the National Pension Scheme, but the two retirement savings instruments could not be compared.
It is learnt that the Labour Ministry took a strong stand with the Prime Minister’s Office and said in a note that the proposal would hit the salaried class which was the core constituency of the government, and that the tax would only yield around Rs. 300 crore from 42 lakh workers.
“The announcement was made with the intent of getting better returns in NPS. After the stakeholders and we got in touch with the Ministry of Finance, then a discussion took place (where) we said that both the NPS and EPF can’t be compared because NPS is only for pension and EPF is a provident fund scheme”, Mr. Dattatreya told The Hindu in an exclusive interview. Mr. Dattatreya said Congress vice-president Rahul Gandhi had made himself a “laughing stock” by claiming that his pressure had led to the withdrawal of the proposal. The Minister said he had met Prime Minister on Tuesday and said the decision to withdraw the EPF tax proposal was in the interest of workers.
