Coronavirus: 8 million people withdraw money from PF, what will be the effect on you

Posted on 29th Jul 2020 by rohit kumar

In three months, 80 lakh people have withdrawn money by breaking their provident fund.

 

Just as money does not come out without breaking the piggy bank, similarly withdrawing money from PF is not an easy task. This fund was created so that even when all the other ways of earning a person have been closed, he can still live his life ahead in it.

 

That is why the rules for withdrawing money from provident funds are very strict and withdrawing money from it while in the job is very crooked.

 

But one of the first steps that the government announced to give relief from the economic crisis that came along with the Corona epidemic was to provide the facility to withdraw money from the PF.

 

Those who are not in employment, they would have got the money of PF even after some time. But for those who were able to get themselves caught in the strait while at work, it was like a lifeline.

 

Although my opinion was still the same and even today, you should not tease your PF amount as long as possible. But the figures that now appear show that about 30 lakh people had probably reached such a condition that there was no other way left in front of them.

 

Withdrawal of 30 thousand crores

 

These are the 3 million people who have withdrawn money from the PF, taking advantage of the special facilities provided by the Covid crisis. But according to the reports published in newspapers quoting EPFO, between April and June, a total of about 8 million people have withdrawn more than 30 thousand crore rupees from their PF accounts.

 

Especially for those earning up to 15 thousand rupees a month, it was a great relief in times of trouble, so that they will be able to survive for a few months. If there is life ahead and employment, then you will think about what will happen to that future, from whose accumulated funds, they have withdrawn money.

 

Anil Swarup, a former coal secretary, author, and outspoken IAS officer, was the central provident fund commissioner when he started the online work of the book according to the PF. Due to this, withdrawing money from PF has become a joke today, for which earlier retired people had to travel around the PF offices for months or years.

 

Anil Swaroop says that it was a very good decision to allow the needy to withdraw some money from the PF as soon as the Corona crisis started. He has even suggested further than this, he believed that the way the government announced the moratorium or rebate on installments of banks and credit card bills, similar rebates should also be given in PF.

 

Spending will improve the economy

12% PF is deducted from the salary of any employee and only 12% is added by his organization. He suggests that both the parts should be given to the employee or bank account with a salary for a few months.

 

Its biggest benefit will be that most people will spend this amount. And to bring the economy back on track at the moment, the most important thing is that people spend. This is the only way in which the business can accelerate without increasing inflation and that too immediately.

 

Even at this time, many experts believe that it was very important for the 30 lakh people who withdrew PF money under the Covid facility and most of them are spending this amount fast or slowly. Especially those who earn less than 15 thousand a month.

 

According to the figures given by EPFO ​​in June, 74% of people were from this category. The count of those earning more than 50 thousand was only 2% in this list.

 

Your pocket will also be affected

But the worrying figure is of those who took out the money of PF through the normal route, not under Covid facility. Between April and June, the number of people withdrawing money from PF is estimated to reach one crore, although most of them do not want to reveal their name and identity.

 

In the last financial year, a total of 1.5 crore people had withdrawn 72 thousand crores from PF. Then in the three months this year, the requests of one crore people come and say something.

 

The reason for withdrawing money in the application of most of these people is stated to be the cost of treatment. But everyone knows that to withdraw money from PF, some reasons go on like treatment, marriage, death in the family, or building a house. Therefore, writing the treatment in the application does not necessarily mean that the money will only work for the treatment.

 

Now the question is, if there is no cure then what is the need to withdraw money? So now look at the calendar. Lockdown started opening in June. People had to return to work. But in the last three weeks of June itself, about one lakh people were withdrawing their PF money every day.

 

Some are half full. This would mean directly that 15 to 20 lakh people were finding themselves trapped in a terrible situation at this time. Somebody lost their job, someone's salary was cut, or someone thought it better to quit the job in the wake of the Corona crisis.

 

It is necessary to secure the future

 

This is the life of the middle-class men. Our people like you. But the money they have extracted from the PF and those who are withdrawing. It is estimated that in the coming few days one crore people will withdraw money. One effect of this withdrawal is going to fall on those whose money is still deposited in the PF Fund.

 

EPFO runs a fund of 10 lakh crore rupees from the salary of about six crore people. If the speed of withdrawing money goes out of this way, then giving good returns on the remaining amount will be far-fetched.

 

That is, you should also be ready to hear the announcement of interest deduction on your provident fund soon. However, in the calamity faced by the country and society, everyone will be ready to accept this small sacrifice.

 

The question that should be done in such a situation, if you had the chance, should you withdraw your PF money and apply it for better returns elsewhere? This path is not open to the top. Secondly, I would not recommend it. At this time, wherever you invest money except the stock market, there is no better interest from PF.

 

And very good returns in the stock market can turn into huge losses at any time. Even if you are ready for that, a certain part of your income should remain in a safe place like PF until the day you have a way other than that, ie retire or no job.

 

If the job has gone away, and after cutting some time there is a possibility of getting a new job, then you will still run the job without straining your PF amount, then soon your future will be so secure that you will not be worried about leaving or leaving the job. Even after that, do it like a king.