Labour and Employment Minister Mallikarjun Kharge is hopeful that his Ministry would be able to persuade the Finance Ministry to give its nod for the decision of the Central Board of Trustees (CBT) to increase the rate of interest on Employees Provident Fund (EPF) from 8.5 to 9.5 per cent for 2010-11.
This would benefit over 4.4 crore PF subscribers in the country.
Mr. Kharge, who is also the CBT chairman, told The Hindu that the query on the PF interest rate was put forth by some officials in the Finance Ministry and it was not a decision of the Finance Minister as such.
“Anyway, I have convened a meeting of officials of my Ministry on Wednesday to discuss the issue and we will be communicating to the Finance Ministry to convince them with facts and figures,” he said.
A senior Labour Ministry official said, “We stand by our calculation and the decision to hike the interest rate by 1 per cent. The first such move since 2005-06, it was taken by the CBT on September 15, 2010, after analysing the figures and after getting satisfied that the surplus of Rs.1,731 crore in the Interest Suspense Account could be utilised for paying the additional interest rate. The increased interest rate will cost the Employees Provident Fund Organisation (EPFO) an additional Rs.1,700 crore.”
The basic objection of the Finance Ministry was how the EPFO could manage and sustain such a huge increase of additional money involved for paying the new interest rate.
Keywords: Employees Provident Fund