In a move that is meant to safeguard the interests of employees, Finance Minister Nirmala Sitharaman, in her Budget 2021 speech, on Monday said that employers who are late in depositing employee contribution to pension, gratuity will not get a deduction for the amount.
The step is aimed at penalising companies that sit on employee contributions they have deducted from their salaries.
Provident fund, a pension fund, is meant to provide employees with lump-sum payments at the time of exit from their place of employment. Employees can also withdraw money from the fund for emergencies. A fixed amount is cut from the employees’ salaries and put in this account with a matching amount contributed by the employer.
In other announcements, Sitharaman proposed a major push for the pandemic-hit health sector, announcing a 137% increase in allocation. She also announced steps for improving the transportation and infrastructure of the country. Especially in the states going to polls this year. Rs 25,000 crore has been allocated for highways in West Bengal, a state that is expecting a nail-biting state assembly election around May. The Finance Minister has proposed building 675 km highways in the state.