Date:20/03/2005 URL: http://www.thehindubusinessline.com/2005/03/20/stories/2005032001760300.htm

Back EPFO trustees' meet today on ways to raise more resources

Our Bureau

New Delhi , March 19

THE Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) will meet on Sunday to figure out ways of raising additional resources required to pay 9.5 per cent interest on provident fund deposits for fiscal 2004-05.

According to EPFO's internal estimates, paying 9.5 per cent interest for the current fiscal would lead to a shortfall of approximately Rs 927 crore between the fund's interest earnings and its interest liabilities for 2004-05.

In August last year, the CBT had recommended an interim rate of 8.5 per cent. In February this year, the Finance Minister, Mr P. Chidambaram, announced after a meeting with the Prime Minister, Dr Manmohan Singh, that the rate of interest would be pegged at 9.5 per cent.

Following the Finance Minister's announcement, the Labour Minister and Chairman of the CBT, Mr K. Chandrasekhar Rao, had told Business Line that, "I would not elaborate the strategy at this point of time for many reasons but be assured that in case of necessity the Government would step in to take the required steps." However, officials in the Ministry of Labour said that even if the Finance Ministry comes forward with some sort of a bailout package to meet the gap between interest earnings and liabilities, the EPF Act does not permit the organisation to accept funds from any sources for paying interest.