New Delhi, September 17 (Daily Kiran) : The Indian government’s recent decision to raise the mandatory salary cap under the Employees’ Provident Fund Organization (EPFO) from ₹15,000 to ₹25,000 per month has been welcomed by industry leaders and labor organizations. This move, announced on September 17, 2026, is seen as a significant step towards expanding social security coverage, promoting formal employment, and enhancing long-term financial security for workers.
Jyoti Vija, Director General of FICCI, expressed that the revision of the EPFO salary cap was long overdue. She noted that the last amendment occurred in 2014 and that there have been substantial changes in salary levels, income, and employment structures since then.
“The government’s decision to increase the salary cap to ₹25,000 is timely,” Vija stated. “Approximately 5.1 million additional employees will now be included in the formal social security framework.” She emphasized that this decision would aid in formalizing employment, retaining employees within organizations for longer periods, and strengthening retirement security.
Vija further explained that when employees have access to provident funds, pensions, and other social security benefits, their morale improves, leading to greater job stability. This, in turn, benefits both employees and employers.
She highlighted that many workers who were previously outside this safety net can now start building a retirement fund for their future. “When individuals are assured of financial security post-retirement, they work with greater dedication and remain committed to their organizations,” Vija added.
Girish Chandra Arya, All India Secretary of the Bharatiya Mazdoor Sangh (BMS) and in charge of the banking sector, also welcomed the decision. He pointed out that labor organizations have long been advocating for an increase in the EPFO salary cap.
Arya remarked, “The ₹15,000 cap set in September 2014 has become inadequate given the current economic conditions and evolving salary structures. This amendment, made nearly 12 years later, is a significant and commendable step for the benefit of employees.”
He noted that the advantages of this decision will not be limited to around 5.5 million employees alone. Under the government’s policy to promote formal employment and integrate workers from the informal sector into the organized sector, even more employees will soon come under schemes like EPF, ESI, and bonuses.
“This is not just about increasing the provident fund; it also provides employees with long-term pension and insurance security, thereby strengthening the economic stability of workers and their families,” Arya concluded.
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