EPFO to begin end of inspector raj

Visits from the Employee Provident Fund Organisation (EPFO) office to your company could soon be a thing of the past, as the EPFO plans to shift the entire compliance operation online.

Senior officials say the EPFO will begin the process on April 1. That will eliminate the need for any EPFO officer to personally inspect company records. In the new system, the EPFO will ask companies to voluntarily disclose all information required to comply with the EPF Act.

Based on the information, the EPFO will devise parameters to discover defaulters. The parameters will change each year to avoid companies being compliant with only certain parameters.

"At present, if there is any complaint then the enforcement officer goes and does the inspection. In some cases, his personal biases and prejudice colour his work. We want to eliminate that," said a senior official. Corruption cases against EPFO employees have been on the rise in recent months.

Last July, the Central Bureau of Investigation registered cases against nine senior officials of the EPFO for causing a loss to the exchequer amounting to Rs 169 crore (Rs 1.69 billion).

The official added most defaulting companies usually understated the number of employees to bring down EPFO liability. The new system will make that difficult.

A member of the Central Board of Trustees of the EPFO, however, expressed opposition to the decision to do away with manual inspections.

"We welcome computerisation, but saying that there will be no need for raids in no solution," said All India Trade Union Congress' D L Sachdeva, also a member of the board. "I doubt whether the EPFO will achieve anything by doing away with inspections. It is needed in some cases," said A D Nagpal of the Hindustan Mazdoor Sangh.