Usher in competition between EPF and NPS

Let's begin with my favourite episode from the 1980s British satire series Yes Minister, featuring senior bureaucrat Sir Humphrey and his boss, Cabinet minister Jim Hacker.

- HARSH ROONGTA

In a famous scene, Sir Humphrey justifies the existence of a hospital with no patients but 500 administrative staff: Jim Hacker: "A hospital without patients? What's the point of that?" Sir Humphrey: "It's a perfectly good hospital, Minister. It has excellent administration and an efficient staff." Jim patients!" Hacker: "But no Sir Humphrey: "Patients are an unnecessary inconvenience for the staff." Jim Hacker: "Isn't the purpose of a hospital to have patients?" Sir Humphrey: "Oh no, Minister. The purpose of the health service is to provide health care, not health." This dialogue perfectly satirises the absurdity of outdated systems, reminding me of rules in our formal sector, framed in the 1950s. These rules on Employee Provident Fund (EPF), Employees State Insurance (ESI) and Profession tax burden employers and employees alike, especially as we struggle to increase formal employment.

Take the example of Sarita, a (fictitious) new employee in Mumbai earning ₹15,000 per month (1.80 lakh annually).

She must pay a profession tax of ₹2,500 annually. The administrative burden of paying this tax is high. With no time limit for arrears collection, notices can arrive 10-15 years later, with steep penalties.