EPS Pension Hike: Private job holders will get minimum pension of ₹ 3,000, government is preparing to increase it
EPS Pension Hike: The government is working on a plan to increase the minimum pension under EPS from ₹ 1,000 to ₹ 3,000. This will directly benefit 36.6 lakh pensioners, although deliberations are still going on regarding its cost and timing.
EPS Pension Hike: The central government is considering increasing the minimum pension under the Employees’ Pension Scheme (EPS) from the current ₹ 1,000 per month to ₹ 3,000. A senior government official told Moneycontrol that this decision could be implemented in the next few months. This initiative is coming at a time when there is a growing concern over the continuous increase in inflation and social security of the elderly.
What is EPS?
EPS is a retirement scheme for organized sector employees in India. It is run by the Employees’ Provident Fund Organization (EPFO). Its purpose is to provide a fixed monthly income to private sector employees after retirement. The fund of this scheme comes from the contribution of the employer i.e. the company. Out of its total 12% contribution in EPF (Employees’ Provident Fund), 8.33% goes to EPS and the remaining 3.67% to EPF.
The government official said, “We are preparing to increase the minimum pension to ₹ 3,000 per month. This was pending for a long time.” Earlier in 2020, the Ministry of Labor had sent a proposal to the Finance Ministry to increase the minimum pension to ₹ 2,000, but it was not approved.
Demand for ₹ 7,500 pension also
During the pre-budget discussion in 2025, a delegation of EPS retired employees had demanded from Finance Minister Nirmala Sitharaman to increase the minimum pension to ₹ 7,500, but they did not get any assurance.
Currently, the total fund of EPS is more than ₹ 8 lakh crore. There are about 78.5 lakh pensioners under this scheme. Out of these, 36.6 lakh people are getting a minimum pension of only ₹ 1,000 per month.
Deliberation continues on financial impact
The official said that the Ministry of Labor is currently evaluating the additional cost associated with implementing the ₹ 3,000 pension. In FY 2023-24, the government spent ₹ 1,223 crore to provide minimum pension to EPS pensioners, which is 26% more than the ₹ 970 crore spent in FY23.
Since September 2014, the government gives a grant to ensure a minimum pension of ₹ 1,000, that is, if a member’s pension is less than ₹ 1,000, then the government pays the difference from its own pocket.
Opinion of Parliamentary Committee and Experts
Recently, the Parliamentary Committee headed by BJP MP Basavaraj Bommai had recommended the Ministry of Labor to immediately increase the minimum EPS pension, as inflation has increased rapidly.
Akhil Chandna, partner, Grant Thornton India, said, “If the minimum pension is increased, it will be a welcome move, especially for low-income group retirees and their dependent families.”
BJP-affiliated economist Sandeep Vempati told Moneycontrol that the retail inflation rate (CPI) has increased by 72% between March 2014 and March 2025. The International Labor Organization (ILO) also advocates linking pensions to inflation. However, due to global economic uncertainty and the government’s fiscal strategy, there is confusion over the timing of this proposal and the amount of pension.
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