Possibility Of Privatisation Of The PF And ESI Depts

Dear All Middle-Level and above Managers HR/Personnel,

The other day, I was attending a seminar on EPF and MP Act/Rules. From the discussion, it so transpired that the PF department has three roles to play simultaneously, i.e., Service Provider to those that deposit money to them (Employer and employee), Arbitrator (Essentially to the Employers who are responsible to deposit the contributions), and Policy makers, as far as Social Security is concerned.

I have often wondered how a person/organization can work successfully as owners of all the above-mentioned roles/functions without being biased. Furthermore, from my experience of the efficiency of the Department on provision of the services in terms of, say, PF Withdrawals, Pension fixation, transfers under Form 13, and EDLI, there is a lot to be desired.

During the discussion, I proposed the possibility of PF Service Providers to be Privatized. The thought of Privatization of the PF and ESI Departments has been presented here for discussion amongst Middle and above-level Managers in the profession to brainstorm and provide their views and recommendations.

I do apologize to the PF department officials and request them not to take it personally.

Regards,

Pradeep Bajaj

Dear Statutory Bodies cannot dilute their powers; otherwise, enforcement is not possible. Your dream will come true only if the Statute is modified in the manner thought by you. It will be a long way to go.

With Regards,

V. Sounder Rajan

Dear Sounder Rajan and Colleagues in HR/Personnel,

I understand that this is the legal position and, in all probability, comes from the position in the profession that you are in. It tends to exercise caution. Your views are still honored due to your professional experience. Views of the users also need to be expressed.

I have no intentions of targeting the statutory provisions; I only address the process for the same. It is the user of the provisions that needs to be given some maneuverability.

It is a foregone conclusion that the three different roles that the EPF and ESI Organizations don, all these need three entirely different approaches. The current organization not only is an arbitrator of the Act and its rules, they also operate the funds and are required to be service providers to its customers (Employees and Employers). See the paradox!

Firstly is that of the Statutory Body. This is very well, as they are responsible to the Ministry/Law. This can well be accomplished by the current organization.

Secondly, the Policy Making and Implementation, a quasi govt body/mix of the Govt/NGOs/Industry/Reps of the employees can best handle this part. We are not quite aware of the Policy Making Machinery, it may well already have all these put together.

Thirdly, is the administration/operation of the fund, for which the contributors are its customers. As such, this org should be responsible to the customer (Employee and the Employer). There are lots of funds and the same also need to be invested like other Financial Institutions to provide the best of returns to its clients, the essential stakeholders. Keeping in view the principle of "Customer is the King," it may well be privatized. This shall well achieve the objective of 'social security.'

Does that make discussion a bit more forthcoming, and my point better understood? There is a need to be a bit open-minded about it. The question has been addressed to the Middle level and above HR/Personnel Managers who have had 'on the ground' experience of handling the matters. Of course, all the other professionals are also welcome to make their views and recommendations known in a free exchange of ideas. This shall make the discussion topic more fruitful.

My solution is just one suggested solution. The readers may suggest many others that may be more workable and smoother than the one suggested.

Regards,

Pradeep

Dear All HR Friends,

I know what I have suggested is totally out of the way. I guess it would have raised many eyebrows, particularly among our HR friends in the Public Sector/PF Dept.

I dare say the thought is rather audacious and beyond the visualization of most. Nevertheless, for one moment, let us believe that this happens. If so, some of the benefits that I see are:

1. The withdrawals shall be prompt.
2. Temporary withdrawals for marriages, loans for plots and flats, etc., shall be processed faster and be available to the members at the right time.
3. The transfer of PF from one account to another shall be assured; today, one sees that this action gets delayed or does not happen.
4. Pension and EDLI payments are done promptly.
5. Interest rates may increase if the investments are done smartly.

Should anyone have any recommendations, comments, or points for carrying the discussion forward, we can brainstorm.

We do not foresee any possibility of a change in the texture/policies on the subject; however, we may brainstorm.

Pradeep Bajaj