The workers who roll beedis in Bengaluru’s beedi colony are leaving the Employees’ Provident Funds Scheme.
Beedi workers would rather not have 10 percent of their salary deducted for the Employees’ Provident Funds Scheme (EPFO). They say that they get paid less than the minimum wage and a 10 percent cut would mean tightening their belts even more. Experts also say the scheme is not implemented properly. The Ministry of Labour and Employment administers this scheme to provide post retirement financial security.
“I cancelled my Employees’ Provident Funds Scheme,” said Kaushar Banu, a worker rolling beedi for more than two decades. The fund deducts money from the salary of these workers. She explains that though she has no guarantee about her life in the future, the money that is deducted for the scheme is needed now.
A report by Employees Provident Fund Organisation said that in one month, September 2022 alone, more than three lakh workers have left the scheme. Kumar Rahul, Regional Provident Fund Commissioner of Bengaluru said, “In the long run, the deduction will help them with social security.” He added that the Central authorities will be further updating the number of people who left the scheme.
Seetharam Berinja V, Secretary of SK Beedi Workers Federation said that the scheme further exploits the workers as the compensation does not happen as directed. “The workers don’t get the pension for every beedi they roll. So, the money deducted does not lead to higher future savings.”
The minimum wage was increased to Rs. 281.77 for 1000 beedis by the Ministry of Labour and Employment on March 14, 2018. Saurabh Bhattacharjee, Associate Professor of Law, at National Law School of India University, Bengaluru said, “The already existing wage being so low is the main issue. The solution is to increase the minimum wage so that they are able to bear the deductions.”
Despite the updated minimum wage, the workers of Beedi Colony in Bengaluru say that they are paid Rs.160. Bhattacharjee added that instead of the 10 percent being subtracted from the workers’ wages, the government should contribute to it. “The burden of future security on the workers should be decreased by an equal contribution from the state,” he said.
Dr Rajasekhar, Director of the Institute of Social and Economic Change, said, “For them, the deduction is very high.” “The money at present that they are earning is needed for marriage and education of their children. Thus, these workers are ready to give up their future security.”
However, Rahul said that there are provisions under the Employees’ Provident Funds Scheme to help the workers with marriage, health and emergency expenses. He said,“The workers can come for an early withdrawal from their fund if they want”
There are over 41 lakh beedi workers under the EPFO as of 2017 out of the 4.5 million beedi workers in the country.
