Overview
- The Union Cabinet approved the increase on Wednesday, September 16, 2026, and the Labour Ministry said the new ₹25,000 ceiling will take effect from Vishwakarma Day, September 17, 2026.
- The government expects the revision to automatically bring about 51 lakh additional employees into mandatory coverage under the Employees' Provident Fund (EPF), Employees' Pension Scheme (EPS) and Employees' Deposit Linked Insurance (EDLI).
- Officials estimate the annual fiscal cost of the expansion at about ₹11,339 crore and approximately ₹56,696 crore over five years, and the Expenditure Finance Committee had recommended the proposal in June.
- The Ministry of Labour and EPFO must complete statutory rule changes and administrative steps to implement the decision, which will also increase employers' mandatory contribution obligations for newly covered staff.
- The move updates a threshold last raised in 2014 and is intended to align compulsory social security rules with sustained wage growth and the growth of formal employment in India.