Employees can also withdraw the fund for select purposes after completing 10 years of service, as against 15 years of service earlier.
The GPF can be taken for education -- including primary, secondary and higher education, covering all streams and institutions.
Earlier, a subscriber could withdraw GPF for beyond the high school stage.
"Some amendments have been made (in rules) from time to time to address the concerns raised by the subscribers. However, the provisions, largely remain restrictive. There is a felt need to liberalise provisions, raise limits and simplify the procedure," the Ministry said.
The provisions in the rules have been reviewed and it has now been decided to permit withdrawals from the fund by the subscriber for obligatory expenses viz. betrothal (engagement), marriage, funerals, or other ceremonies of self or family members and dependants, besides illness of self, family members or dependants, it said.
"It has been decided to permit withdrawal of up to twelve months pay or three-fourth of the amount standing at credit, whichever is less. For illness, the withdrawal may be allowed up to 90 per cent of the amount standing at credit of the subscriber. A subscriber may seek withdrawal after completion of ten years of service," the ministry said in an order to all central government departments.
The GPF can be withdrawn for purchase of consumer durables also.
Existing rules do not give any time limit or sanction and payment of withdrawal amount.
"Therefore, it has been decided to prescribe a maximum time limit of fifteen days for sanction and payment of withdrawal from the fund. In case of emergencies like illness etc., the time limit maybe restricted to seven days," the order said.
Now, the employees also do not have to furnish any documentary proof in support of their request to withdraw from GPF except for a self-declaration.
In all cases of withdrawal from the fund by the subscriber, the declared head of department (HOD) is competent to sanction withdrawal.
"No documentary proof will be required to be furnished by the subscriber. A simple declaration form by the subscriber explaining the reasons for withdrawal would be sufficient," the order said.
At present, withdrawal of up to 90 per cent of balance without assigning reasons is allowed for government servants who are due for retirement on superannuation within a year.
It is proposed that this may be allowed for up to two years before superannuation, it said.
The GPF can be withdrawn for purchase of motor car, motor cycle, scooter etc. or for repayment of loan already taken for the purpose, as per new rules issued by Ministry of Personnel, Public Grievances and Pensions.
The amount will also be made available for making deposit to book a car or motor cycle, besides their extensive repair or overhauling, it said.
The withdrawal will also be allowed for housing including building or acquiring a suitable house or ready built flat, repayment of outstanding housing loan, purchase of house site for building a house, constructing a house on a site acquired, reconstructing or making additions on a house already acquired besides renovating, additions or alterations of ancestral house.
"It is also decided do away with the present instructions which lay down that subsequent to the sale of house for which GPF withdrawal has been availed, the amount withdrawn has to be deposited back. GPF withdrawal for housing purpose will no longer be linked with the limits prescribed under House Building Advance (HBA) rules.
"A subscriber may be permitted to avail the facility at any time during his service," the new rules said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)