Date:24/07/2007 URL: http://www.thehindu.com/2007/07/24/stories/2007072457390100.htm

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PF rate to be retained at 8.5 per cent

Aarti Dhar

NEW DELHI: The Central Board of Trustees of the Employees’ Provident Fund Organisation on Monday recommended that the existing rate of interest on the EPF at 8.5 per cent be retained for 2006-07.

The recommendation followed protests from the Left-backed trade union representatives who opposed any reduction. They gave a written note of disapproval and demanded that the interest rate be increased to 9.5 per cent as banks were paying higher interest.

Briefing reporters after a special board meeting here, Union Minister of State for Labour and Employment (Independent charge) Oscar Fernandes admitted that the decision to maintain the rate at 8.5 per cent was taken amid protests from union representatives but said the suggestion was agreed on by a majority vote after the board accepted the report of a sub-committee appointed to look into EPF accounts. The board’s recommendations would be sent to the Finance Ministry, which would notify the rate.

This would put a burden of Rs. 450 crore on the EPF but the deficit, according to the report, would be met from the Interest Suspense Account, the Contingency Reserve Fund and the Special Reserve Fund. The expected interest income during 2006-07 was Rs. 7,372.67 crore, while the liability at 8.5 per cent would be Rs. 7,822.57 crore.