Finance Minister Nirmala Sitharaman acknowledged concerns about the Employees’ Provident Fund (EPF) return falling to a more than four-decade low of 8.1% in 2021-22, stressing that the decision was taken based on ‘today’s realities’, and the returns on other savings instruments were even lower.
Responding to Rajya Sabha MPs flagging the EPF rate cut from 8.5% to 8.1%, Ms. Sitharaman said she appreciated and recognised their point about the decision, while emphasising that it was approved by the EPF Organisation’s Central Board of Trustees, which includes representatives of workers, management, and the government.
“The Sukanya Samriddhi Yojana [rate] is at 7.6%, the Senior Citizens’ Savings scheme is at 7.4%, the PPF (Public Provident Fund) is at 7.1%, State Bank of India’s highest rate for five to 10-year fixed deposits is at 5.5% and it has a mark-up for senior citizens which takes it to 6.3%,” the FM said. “The government’s own borrowings on an average, across various tenures, is at 6.28%. With all these, the EPFO has taken a call to keep it at 8.1%,” the Minister said.
“It has yet to come to the Finance Ministry for approval, but the fact remains that these are the rates that are prevailing today and it is still higher than the rest of the (instruments),” Ms. Sitharaman said in response to the debate on the Appropriation Bill in the Upper House of Parliament.