No move to reduce EPF interest rate: Jatia

By Our Special Correspondent

NEW DELHI, FEB. 7. The Union Labour Minister, Dr. Satyanarayan Jatia, today said there was no move to reduce the interest rate on the Employees Provident Fund (EPF).

Addressing a conference on ``creating safety net towards a new labour policy,'' organised by the FICCI here, he asserted that the Government was pro-labour and it realised that reduction in the EPF interest rate would deprive the employees of the returns on their hard earned money.

Dr. Jatia also promised an early meeting of the Board of Trustees of the EPF, which is the authority to decide issues relating to reduction in interest rate. However, it is not clear whether the Board of Trustees would consider the S.A. Dave Committee report on investing the proceeds of EPF in securities, yielding higher returns.

The Minister was non-committal on this count. The Dave Committee report commissioned by the Ministry of Social Welfare has recommended sweeping changes in the investment pattern of EPF proceeds to enable the employees to earn more returns from their investment.

However, Dr. Jatia asserted that the Government was keen on revising its labour policies in the new millennium with a view to creating a sustainable safety net for employees. The Government was looking forward to developing a safety net to meet the expenses towards retraining and redeployment and for Voluntary Retirement Scheme (VRS).

``We have to professionally manage the financial resources available in the VRS fund and evolve a safety net for labour which will be helpful to them,'' Dr. Jatia said, adding that with the limited financial resources, it was essential to make funds available under the VRS package for distribution among workers.

The FICCI president, Mr. G. P. Goenka, warned against the deficiencies in the National Renewable Fund (NRF) instituted by the Government in 1992, which he felt, was not operated in tune with the spirit and aspirations of an ideal social safety net. NRF's stress on one-time payment - as envisaged in the VRS schemes mooted by some private sector companies, - was not the right approach.

He reiterated that the FICCI favoured restructuring rather than closure as a solution for sick industrial units or financial institutions like banks. ``Retraining and redeployment is the best strategy for devising an appropriate safety net mechanism for long-term rehabilitation plan.''

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