Relaxing GPF withdrawal norms will benefit economy, says government

The Centre is confident about its recent decision to relax withdrawal norms for government employees from the General Provident Fund (GPF), saying that both the government and employees will benefit from the decision.

As the employees would be able to withdraw their funds, it would raise demand for consumer durables and housing, thus benefiting the economy.

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It was on March 7 that the government had liberalised GPF rules regarding withdrawals for education, obligatory expenses, illness and purchase of consumer durables. While earlier employees who had completed 15 years of service could withdraw their fund, now the criterion has been relaxed by 5.

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"These reforms may, in general, be taken as a reaffirmation of the mindset of the present Central Government and the prime minister of trusting the intention and basic honesty of purpose of the government employees, preventing undue harassment by cutting down the redtape, thereby making these withdrawals, that inevitably are availed at critical junctures or for imminent needs during the life of the government employee, easier and more financially beneficial for him," said a statement from government.

"Along with the benefits accruing to the government employees, the economy also stands to gain from these amendments. Demand for consumer durables and housing will get a boost with the larger and expedited withdrawals from GPF that the subscribers are projected to make with the implementation of these reforms. This will help these sectors at a time when bank credit off-take is low," it added.

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