Much like PSU banks struggling to arrest NPAs in times of slowdown, the Employees Provident Fund is on an over drive to speed up the recovery of dues from errant firms and reduce arrears that have mounted to Rs 4,157 crore so that it can build enough surplus and offer high interest to its subscribers.
The move comes after the Comptroller and Auditor General (CAG) in its performance audit slammed EPFO for slow recovery of dues despite court orders and delays in filing criminal cases against companies that dont deposit PF dues in time.
Falling returns from its bond portfolio and rising arrears have lowered the funds ability to pay higher interest to its subscribers last year. Due to paucity of funds in 2011-12, EPFO paid an 8.25% interest as against 9.5% in the previous year.
The increasing trend in arrears of provident fund allied dues has become a matter of concern. The CAG, which recently conducted performance audit of the organisation for the period from 2006-07 to 2010-11, observed that the contribution dues and arrears to be received fro the establishments has been mounting on one hand and recovery shows a downward trend on the other, additional PF commissioner PK Udgata said in an internal circular.
It is seen that there has not been effective review and monitoring of recovery of current and arrears demand in accordance with the instructions, he said adding the performance of recovery for 2012-13 was not very much encouraging.
EPFO head office has asked regional offices a series of steps to improve recovery including making efforts to vacate a stay where courts have granted stay, filing of claims when a company is going for liquidation and monitoring of receipts.
CAG has pointed out that field officers dont take prompt action in collecting fines awarded by courts. The CAG has also pointed out that there is considerable delay in filing criminal cases in instances where contributions deducted from wages of employees are not remitted to the statutory account by the employer. The CAG audit found that delays in initiating appropriate legal proceedings by EPFO impacts the timely collection of dues.
EPFO officials cited various reasons for the delays including shortage of manpower.
During 2010-11, EPFOs total arrears amounted to R 2,383.49 crore of which dues amounting to R 1,851.31 crore, or 77.67%, may not be immediately realisable and R 532.18 crore are realisable through recovery proceedings.