The Decaying EPF Asset Class

Hello - Naina Mittal - Contributions growth at 10 yr low - See the below reply - Dysfunctional EPFO website - Reply - I have clarified/explained / discussed earlier. Not sure why you did not had any counters but still keeps doing propaganda. It seems like you are a paid congress loyalist who lacks logical argument and sense and keeps running the leftist propaganda.People who act as paid agents for a political party often stop thinking critically and objectively. Their opinions become filtered through the lens of the party's agenda, rather than through an independent and unbiased analysis of facts. This prevents the possibility of understanding multiple perspectives and leads to a narrow, one-sided view of the world. Engaging in paid political propaganda can lead individuals to become part of an echo chamber, where they only hear and share views that confirm their biases. This is detrimental to healthy democratic debate, which requires the exchange of diverse ideas and respectful disagreement. Propaganda often involves spreading misinformation or half-truths to sway public opinion in favor of a particular ideology or leader. This can distort the political process and mislead voters, creating divisions based on falsehoods. In a democracy, it's crucial that people make informed decisions based on facts, not on manipulated narratives. When someone acts as a paid agent to promote a political agenda, the language often becomes more aggressive, divisive, and personal. Instead of debating policies and ideas, it shifts to attacking the character and integrity of political opponents. This leads to a toxic environment where people become more entrenched in their views, making it harder to find common ground. Acting as a paid agent for a political party creates a conflict of interest. One's opinions and actions may be driven by financial incentives rather than genuine beliefs, which compromises personal integrity. This can also lead to corruption within political systems, where people are swayed by money rather than principle. True democracy thrives when people participate as informed, independent citizens who make choices based on their values and the best interests of the nation. If people act as paid agents to promote a particular party, they are essentially selling their autonomy and democratic rights in exchange for personal gain. When political propaganda becomes rampant, it leads to disillusionment among the general public. People start questioning the authenticity of political discourse and the reliability of news sources, which erodes trust in democratic institutions and the electoral process. Propaganda is a powerful tool that deepens divisions in society. It often amplifies the "us versus them" mentality, which fosters hatred and mistrust between different groups. This kind of division weakens social cohesion and undermines efforts to solve complex societal issues. Individuals who are known for promoting partisan propaganda can lose credibility in the long run. Whether on social media or in personal interactions, being recognized as a paid agent of a political party can erode trust among peers, as people may view them as untrustworthy or insincere. Political propaganda, especially when it’s pushed aggressively, can strain personal relationships with friends, family, and colleagues. People who are consistently promoting one-sided political views can alienate others who hold differing opinions, leading to unnecessary conflict. A healthy democracy thrives on the free exchange of ideas, open debate, and informed decision-making. When people are paid to push a particular agenda, it undermines the principles of free speech and democracy itself. The true value of democracy lies in individual agency—the ability of every citizen to choose their path and participate in governance without external manipulation. Paid propaganda seeks to manipulate voters into supporting a political ideology, often based on emotional appeal rather than logical, evidence-based arguments. This can lead to decisions that are not in the best interests of the country but serve the political and financial interests of the few. - 30% rejection rate - Reply - Same as above - Fully Taxable beyond 2.5 lacs pa - Reply - Same as above - Red tapism and bribes - Reply - Yes I agree, Do you have evidences ? If yes, why do not we file cases, put on social media, why not put them behind bars instead of making statements, you should instead record your statement in court. - Corp. Defaults at all-time high - Reply - See the below reply - Illiquid and mandatory - Yes it required to be illiquid and things may get change in coming times which may allow to withdraw up to 50% CONTRIBUTION GROWTH AT 10 YEARS LOW: The growth of the Employees' Provident Fund (EPF) is influenced by various factors, such as interest rates, government policies, and economic conditions. The return on EPF contributions has been around 8-8.5% per annum in recent years, which is lower compared to earlier decades when the interest rate was higher, sometimes even exceeding 9-9.5%. If you're asking whether the EPF's growth has been poor over the past 10 years compared to earlier periods or compared to Congress-led rule, it requires some context. EPF Interest Rates Over the Years Under the Narendra Modi government (since 2014), the EPF interest rate has generally ranged from 8% to 8.65%, with minor variations year-to-year. This is relatively lower than the 9-9.5% interest rate that prevailed in the early 2000s and during the Congress-led UPA government. During the UPA government (2004–2014), EPF interest rates were generally more consistent, at 8.5-9.5%. At that time, the Indian economy was growing at a robust pace, and inflation was somewhat lower than it has been in more recent years. Under the current BJP-led government (since 2014), there have been pressures on the EPF interest rate due to several economic challenges, such as: Global economic conditions: The global low-interest environment after the 2008 financial crisis. Inflationary pressures: Rising inflation that erodes real returns on fixed-income instruments like EPF. Economic slowdown: Periodic economic slowdowns have impacted the government's fiscal situation and its ability to offer higher returns. Low yields on government bonds: EPF funds are largely invested in government securities, and low bond yields in recent years have affected returns. Is EPF Growth Worse Than Under Congress? While EPF interest rates were slightly higher during the Congress-led UPA rule, the difference is not drastic. The actual impact on your corpus would depend on the amount you are contributing to the EPF and the number of years your funds are invested. Other Considerations Inflation Impact: Even though the EPF's nominal return might seem lower, in real terms (adjusted for inflation), the returns may still be positive, although lower than what you might expect in a high-growth environment. Safety and Stability: EPF remains one of the safest long-term investment options, with government-backed returns, which may be more valuable than higher returns from riskier assets, especially during periods of market volatility. Economic Context: The performance of EPF is also tied to the broader economic health of the country. The government's economic policies, whether under the Congress or BJP, have an indirect effect on EPF returns, but they do not have direct control over the interest rates set by the Employees' Provident Fund Organization (EPFO). Conclusion The growth of EPF contributions in terms of interest rates has indeed been lower in the past decade than during the Congress-led UPA rule, but whether it’s "worse" depends on the perspective. The return on EPF is still one of the highest guaranteed returns in the country for fixed-income investment, even if it is lower than in the past. Whether this rate is "worse" also depends on the comparison you're making — for example, to other long-term investments like equities, which typically offer higher returns but also come with more risk. CORP. DEFAULTS AT ALL TIME HIGH: The issue of corporate defaults and the management of non-performing assets (NPAs) in India has been a key concern in both the Modi government and the Congress government. However, the approach towards corporate defaults, NPAs, and financial stress in India has evolved over time and is shaped by various factors, including the global economy, domestic economic policies, and the financial health of companies in different sectors. Let's break it down by government periods to understand the key differences: Corporate Defaults and NPAs Under the Congress Government (2004–2014) Rising NPAs: Corporate defaults were rising significantly during the UPA government (2004–2014). This period saw a rapid increase in credit growth, particularly to large corporates in sectors like infrastructure, steel, power, and real estate. Many of these loans were not properly monitored or evaluated, leading to a large number of defaults later on. The Global Financial Crisis (GFC) of 2008 also played a role, as it impacted many industries, especially exports and manufacturing, which in turn affected the ability of corporations to repay their loans. Lack of Timely Action: Non-performing assets (NPAs) began to increase sharply after 2010. The Congress-led UPA government was criticized for not addressing the growing bad loans issue in a timely and aggressive manner. The banks were reluctant to recognize NPAs due to political pressure to maintain credit growth and support large corporations. Many of the defaults were related to large corporate borrowers, with some of the biggest names in the business world being involved. The focus during this period was more on growing the economy and boosting credit, rather than addressing the systemic risk posed by bad loans. The Role of Political Influence: There were allegations of political interference in corporate lending. The Congress government faced criticism for being too lenient toward large corporate defaulters, with allegations of crony capitalism and corporate favoritism. The 2G Spectrum Scam and the Coal Scam during this time revealed the extent of corruption and political interference in the business sector, which worsened the financial environment. The Insolvency and Bankruptcy Code (IBC) – A Missed Opportunity: The Congress government did not have a structured insolvency mechanism in place to address corporate defaults. While the Insolvency and Bankruptcy Code (IBC), a major reform for addressing corporate defaults, was passed in 2016 under the Modi government, the groundwork for such a law was discussed earlier during the UPA regime but not implemented. Corporate Defaults and NPAs Under the Modi Government (2014–Present) Increase in NPAs Post-2014: The Modi government inherited a significant NPA crisis from the UPA government. Between 2014 and 2016, the extent of bad loans was becoming clearer. The data showed that NPAs had ballooned under the previous government, and the financial system was under strain. The Reserve Bank of India (RBI), in its periodic reports, revealed that NPAs of public sector banks had risen sharply. Between 2014 and 2018, the gross NPAs of Indian banks increased significantly, reaching around ₹10 lakh crore (around 10% of total loans). Aggressive Measures to Tackle NPAs: Recognition of NPAs: One of the first major steps taken by the Modi government was to force banks to recognize NPAs more aggressively. In 2015, the RBI's Asset Quality Review (AQR) made it mandatory for banks to classify loans as NPAs if they were overdue for more than 90 days, even if the loans had not been reported as bad by the banks earlier. The Banking Regulation (Amendment) Act, 2017 was passed, which empowered the RBI to direct banks to take action against large defaulters. Under the Modi government, more loans were written off as NPAs, and large corporations were asked to settle their debts through resolution processes under the IBC. This aggressive recognition policy initially led to a rise in NPAs but was seen as a necessary step to cleanse the system. Introduction of Insolvency and Bankruptcy Code (IBC): The IBC was a major reform implemented in 2016. It aimed to streamline the process for resolving corporate defaults by ensuring time-bound insolvency proceedings. Companies with large NPAs could be taken to bankruptcy courts, with the possibility of their assets being sold off to recover dues. The government also brought in Pradhan Mantri Mudra Yojana (PMMY) and Start-up India to encourage entrepreneurship and reduce the financial stress on small businesses and MSMEs. High-Profile Cases: The Modi government also faced criticism for high-profile cases of corporate defaults, particularly related to businessmen like Vijay Mallya (Kingfisher Airlines), Nirav Modi, and Mehul Choksi. These cases of financial fraud, involving the Punjab National Bank (PNB) scam, brought attention to issues of bank governance, loan recovery, and the need for stronger financial institutions. However, the IBC process was able to resolve some high-profile corporate defaults such as Bhushan Steel, Essar Steel, and Alok Industries, allowing the banks to recover substantial portions of the loans. Recapitalization of Banks: The Modi government undertook a recapitalization program for public sector banks, injecting capital to stabilize them after the heavy load of NPAs. This initiative was aimed at restoring the health of the banking sector and enabling banks to continue lending. The National Asset Reconstruction Company (NARCL) was also set up in 2021 to specifically handle bad loans and distressed assets, allowing for a more focused resolution of NPAs. Corporate Tax Reforms and Push for Ease of Doing Business: In addition to addressing defaults, the Modi government introduced several tax and regulatory reforms, such as reducing corporate tax rates and simplifying business regulations to attract investment and boost economic growth. These measures were intended to provide a more conducive environment for businesses to grow and reduce financial distress. GST (Goods and Services Tax) was also introduced to streamline tax systems, which helped bring more businesses into the formal sector and improve the financial health of small businesses. Key Differences Between the Congress and Modi Governments on Corporate Defaults Timeliness and Aggressiveness of Addressing NPAs: Under the Congress government, the issue of corporate defaults was largely ignored or downplayed, and NPAs were not fully recognized until later in the UPA's tenure. The Modi government was more aggressive in recognizing NPAs early, especially through the Asset Quality Review (AQR) in 2015, and implemented the Insolvency and Bankruptcy Code (IBC) to expedite the resolution process. Political Will: The Modi government was seen as having stronger political will to take tough decisions, even if they involved forcing major corporations to face insolvency proceedings. It has faced significant criticism over the years, but has remained committed to cleaning up the banking system. The Congress government faced criticism for political interference and was accused of being lenient toward corporate defaulters, which led to the rapid accumulation of NPAs during its tenure. Reformative Steps: Modi’s government took bold reforms like the IBC, recapitalization of banks, and digital financial inclusion initiatives to address corporate defaults and improve the overall financial health of businesses and banks. The Congress government, though it initiated some steps like the Strategic Debt Restructuring (SDR) scheme, did not take as aggressive or timely actions to deal with NPAs. Conclusion: The Modi government has been more aggressive in addressing corporate defaults and NPAs, primarily through stronger regulations, reforms (like IBC), and bank recapitalization. While the Congress government also dealt with corporate defaults, it was seen as less proactive in handling the growing crisis of NPAs during its tenure. However, the roots of the NPA crisis lie in the years leading up to 2014, with mismanagement of loans, political interference, and inefficient financial oversight. Both governments have faced challenges in addressing this systemic issue, but the Modi government has focused more on structural reforms and clean-up efforts to resolve the problem. more  

every govt dept whether in central or state and more so in states is full of corruption a legacy inherited by the present govt from its predessor and will take years to remove the mindset and catch the culprit .Everyday in the papers one can see lokayuta catching govt dept revenue people with bribes from aam aadmi for passing the bills etc.They should be given powers to put those people in jail which is lacking.Lokayukta should have their own court and also police and staff etc for their operation similar to ed and cbi more  

It is time for Government to replace Provident Fund Scheme with National Pension Scheme (NPS) from FY 2025-26. Only employers should contribute to NPS for their employees and get 100% deduction as expenditure for Income Tax purpose. more  

Absolutely correct. It would seem that Corporations are aided and abetted by EPFO in short-changing and eventually defrauding employees by not updating records correctly rendering withdrawal impossible. The corporations are simply not held accountable. And yet EPFO wins awards!!! The irony!!! more  

Government deptt means bribe centre more