Under Section 144 of the Code on Social Security, 2020,

Solution

Section 144 of the Code on Social Security, 2020 empowers the Central Government, by order, to defer or reduce the employer's contribution, employee's contribution, or both, payable under the EPF Chapter (Chapter III) or the ESI Chapter (Chapter IV). This power can be exercised for a period of up to 3 months at a time in respect of all or specified establishments, for the whole of India or any part thereof, in the event of a pandemic, epidemic, or national disaster. This provision was operationally deployed during the COVID-19 pandemic in 2020, when the Government reduced EPF contributions for both employers and employees from 12% to 10% to ease financial stress on businesses and workers. Importantly, this power is limited to EPF and ESI contributions it does not extend to gratuity, bonus, or other social security entitlements. The reduction must be for a defined period and cannot be indefinite, ensuring that the relief remains extraordinary and time-bound.