Employees' provident fund organization: Empowering members by digital transformation

Published date01 November 2018
Date01 November 2018
Employees'provident fund organization: Empowering members
by digital transformation
Ravichandran Narasimhan
|Joy P. Vazhayil
|Sundaravalli Narayanaswami
Production and Quantitative Methods Area,
Indian Institute of Management, Ahmedabad,
Chief Provident Fund Commissioner,
Employees' Provident Fund Organization,
New Delhi, India
Public Systems Group, Indian Institute of
Management, Ahmedabad, India
Sundaravalli Narayanaswami, Indian Institute
of Management, Ahmedabad, India.
Email: sundaravallin@iima.ac.in
Employees' Provident Fund Organization (EPFO) was established by the Government
of India with the purpose of ensuring financial and social security for industrial
workers and their dependents. With more than 150 million accounts of its members,
EPFO is the world's largest social security organization. Operational processes of
EPFO were riddled with over emphasis on rules and regulations but were weak on
transparency, accountability, effectiveness, and efficiency. Consequently, the primary
purpose of social security of industrial employees was compromised. Business process
reengineering combined with adoption of Information and CommunicationTechnology
(ICT) and social media brought a sea change to the functioning of EPFO. This paper
documents the transformation of EPFO from a bureaucratic, opaque organization to a
customercentric, stakeholderfriendly, transparent, and accountable organization.
Managing organizations and aligning them constantly to the purpose
for which they were created is a challenging task. Although the pur-
pose of an organization is clearly articulated when it is created, as time
progresses, the functioning of the organization slowly drifts from its
stated purpose. Several factors including the environment, leadership,
organization structure, processes, lack of ICT deployment, profile of
employees, incentive structure, organization culture, bargaining power
of the customers, and intensity of competition contribute to this drift
(Porter, 2008).
Employees' Provident Fund Organization (EPFO) was created to
provide social security and welfare for the economically vulnerable
workforce in India. However, over time, the organization engaged
itself with bureaucratic processes, nonvalue adding documentation,
inadequate supervision and accountability, and poor monitoring on
compliances. Adopting ICT, social media application brought in sea
changes. This paper documents this transformation (Table 1).
EPFO is under the administrative control of Ministry of Labour and
Employment, Government of India. It was established soon after
Indian Independence with the purpose of ensuring social security for
industrial workers and their dependents. Today, EPFO in India is
one of the world's largest social security organizations; it
maintains more than 150 million member accounts. EPFO caters to
employees in public/private organizations with minimum employee
strength of 20. An employee earning a monthly salary of less than
Rs. 15,000 is entitled for an Employee Provident Fund Scheme 1952
(EPF) account.
The welfare schemes framed under the law are administered by a
set of local offices (Table 2) of EPFO across the country under the
overall supervision of the Central Board of Trustees (CBT). In the year
201617, 0.926 million organizations and 46 million contributing
members from 190 industries were enrolled with EPFO. Table 3 cap-
tures the growth in number of subscribers (employees and establish-
ments) over the years.
The EPFO operated three welfare schemes: (a) EPF Scheme 1952, (2)
Pension Scheme 1995 (EPS), and (3) Insurance Scheme 1976 (EDLI).
The EPF scheme allows employees to save funds on a monthly
basis (which accumulated along with interest) and is payable in full,
upon retirement or death, whichever is early. The employees are also
entitled to partial withdrawal of funds for planned and unplanned fam-
ily financial needs such as children's education or marriage, buying
properties, and expensive medical treatment.
Received: 18 May 2018 Accepted: 10 June 2018
DOI: 10.1002/pa.1844
J Public Affairs. 2018;18:e1844.
© 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/pa 1of9

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