Special fund mooted for COVID expenses

Source to be voluntary interest-bearing contributions from govt. salaries, pensions

July 27, 2020 11:41 pm | Updated 11:42 pm IST - THIRUVANANTHAPURAM

A dedicated COVID-19 Income Support Fund has been proposed to bring succour to the affected sections and to source funds to meet allied exigencies.

An expert panel headed by former Chief Secretary K.M. Abraham, which was tasked with preparing a COVID-19 response strategy, has mooted the constitution of such a fund to meet medical and other expenses and to implement relief packages for the needy.

Voluntary interest-bearing contributions from salaries and pensions have been suggested as the source of the corpus fund. Government employees drawing a monthly salary above ₹20,000, staff of government agencies, public sector undertakings, statutory agencies, corporations and autonomous bodies could make voluntary contributions to the scheme. Service pensioners, other than family pensioners, drawing a monthly pension of ₹37,500, also could contribute.

Exemptions have been proposed for differently abled pensioners as well as pregnant women and widows. Contributions may be deducted for 12 months from September to August next year.

0.25% more than PF rate

A floating interest has been proposed for the contributions and it has been specified that it should be 0.25% more than the rate offered on Provident Fund from time to time.

A lock-in period up to March 21, 2023, has been proposed for the contributions and after that, the amount would be returned in four quarterly instalments on July 1 and October 1, 2023 and April 1, 2024. The amount would be returned in the case of superannuation or termination of employment with the interest accumulated till then on April 1, 2023.

Separate account

The amount received as contributions should be maintained in a separate account in a nationalised bank. The interest-bearing contributions from employees are expected to raise about ₹3,300 crore and from pensioners, about ₹375 crore.

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