Budget 2025 Expectations: Trade Unions Urge For Key Reforms, Demand Higher EPFO Pension & Tax Relief

As India gears up for the Union Budget 2025-26, trade unions have laid out a series of pressing demands to the government, seeking reforms in worker welfare, taxation, and social security. During the customary pre-budget consultation with Finance Minister Nirmala Sitharaman on Monday, union leaders voiced their expectations for a budget that prioritizes the working class, gig economy workers, and social welfare programs.

Among their primary demands was a fivefold increase in the minimum pension under the Employees' Provident Fund Organisation (EPFO) from the current Rs 1,000 to Rs 5,000 per month. Additionally, they called for the immediate constitution of the 8th Pay Commission to revise government employees' salary structures, as the 7th Pay Commission was set up over a decade ago in February 2014.

Social Security & Tax Reforms

Highlighting the challenges faced by informal and gig economy workers, the trade unions pressed for the introduction of a universal social security scheme tailored to their needs. They also urged the restoration of the Old Pension Scheme (OPS) for government employees, arguing that it ensures better financial security in retirement compared to the National Pension System (NPS).

On the taxation front, unions advocated for an increase in the income tax exemption threshold from the current Rs 5 lakh to Rs 10 lakh per annum. They also proposed that income derived from pensions should be entirely tax-exempt, citing the financial strain on retirees. Furthermore, an additional 2% tax on the super-rich was suggested to generate revenue for funding social security benefits for informal sector workers.

Privatisation & Workforce Reduction

Trade unions expressed strong opposition to the ongoing privatisation and corporatisation of Public Sector Undertakings (PSUs). TUCC National General Secretary SP Tiwari reflected on the need to halt these moves, emphasizing the critical role of PSUs in supporting India's economy and workforce. Concerns were also raised about the drastic reduction in the number of permanent employees in Central Public Sector Enterprises (CPSEs), which has declined from 21 lakh in the 1980s to just over 8 lakh in the current fiscal year.

CITU National Secretary Swadesh Dev Roye pointed to the sharp drop in CPSE employment as a worrying trend, urging the government to safeguard the future of public sector employees and maintain adequate staffing levels in these enterprises.

Agriculture & Worker Wages

The demands also extended to agricultural labourers, with unions advocating for the implementation of a minimum wage policy for farm workers and their inclusion under a comprehensive social security framework. These measures, they argued, are essential for uplifting rural India and ensuring fair compensation for its workforce.

Budget Allocation for EPF & ESIC

Deepak Jaiswal, National President of the NFITU, highlighted the need for a separate budget allocation for the Employees' Provident Fund (EPF) and Employees' State Insurance Corporation (ESIC). This, he noted, would boost the delivery of social security benefits to workers in the unorganized sector, who often lack access to basic financial safety nets.

With the Union Budget 2025-26 scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1, all eyes are now on the government's response to these demands. The unions' proposals reflect widespread concerns about the socio-economic challenges faced by India's workforce and emphasize the need for reforms that promote inclusivity, fairness, and financial security.