The Indian government has approved a significant hike in the EPFO wage ceiling to ₹25,000 per month, aiming to broaden social security for millions of workers, despite increased costs for the government and potential impacts on workers’ take-home pay.
The Union Cabinet has approved a rise in the Employees’ Provident Fund Organisation wage ceiling for mandatory coverage to ₹25,000 a month from ₹15,000, a move that will widen access to retirement savings and other social security benefits for millions of lower- and middle-income workers in India. According to the official briefing, the change is expected to bring more than 5.1 million additional employees into the scheme.
The revision comes after 12 years without a change and follows a long period in which wage growth and formal employment expanded faster than the coverage threshold, which was last lifted to ₹15,000 in September 2014. The official release said the new ceiling is intended to better reflect sustained income growth and the spread of formal jobs across the economy.
The financial impact on the government is also set to rise. Officials estimate annual spending of about ₹11,339 crore, compared with current budgetary support of roughly ₹10,250 crore, while the total outlay over five years is projected at about ₹56,696 crore. Separate reports from Moneycontrol and Outlook Business said the move had already won clearance from the Department of Expenditure and the finance ministry, and Moneycontrol reported that implementation could begin from April 2027. Analysts have also noted that the higher ceiling may increase employers’ costs and reduce take-home pay for some workers, even as it strengthens the EPFO corpus and broadens retirement protection.
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