Financial Daily from THE HINDU group of publications
Tuesday, Jul 09, 2002

Port Info

Group Sites

Industry & Economy - Small Savings

Finance Ministry man to be EPFO trustee

Shaji Vikraman
Hema Ramakrishnan


THE securities scam in the Seafarer's Provident Fund and the defaults on the bonds issued by IFCI seem to have prompted the Labour Ministry to take on board a representative from the Finance Ministry as a trustee in the Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO).

The Labour Ministry, which has for the last couple of years been on collision course with the Finance Ministry particularly on the annual cut in the interest rate paid on EPF deposits and investment pattern, has decided to appoint a representative from the Finance Ministry as a trustee in the CBT.

The Joint Secretary in the capital markets division is likely to be the Finance Ministry's nominee on the CBT, senior officials said.

The CBT is a tripartite body chaired by the Labour Minister.

Besides the Chairman and the Vice-Chairman, the board has 40 trustees — five Union Government representatives, 15 State Government representatives and 10 employers and employees representatives each.

The board is scheduled to meet here on Tuesday under the chairmanship of the new Labour Minister, Mr Sahib Singh Verma, to consider the proposal to cut the interest rate paid on EPF deposit to 9 per cent.

Given the divergent views of the two Ministries over the interest rate issue, the Finance Ministry reckons that it would be prudent to have its own representative as a trustee on the board.

Although the majority view will prevail, the trustee has the right to dissent on any proposal, the officials said.

Like his predecessor, Mr Sahib Singh Verma has also said there was no rethinking in his Ministry on the interest rate on EPF deposits.

The Finance Ministry has also been pressing for the creation of a capital risk cover fund in the EPFO, particularly after the recent Government securities scam rocked some of the provident funds, including the Seafarers' Provident Fund.

"A corpus needs to be created as a contingency measure given that EPF deposits, unlike the GPF, are not backed by a guarantee from the government," the officials said.

Currently, the accumulated investment corpus under the EPF for both exempted and non-exempted establishments is estimated to be close to Rs 85,000 crore.

Although the CBT has sought a change in the investment pattern — permitting higher investments in Government Securities — the Finance Ministry is yet to take a final view.

Send this article to Friends by E-Mail

Stories in this Section
Dumping duty mooted on acrylic yarn from Nepal

Major economies need structural reforms to sustain growth: BIS
Kerala: No more delay in pension disbursal
Centre to discuss Pampa pollution issue
India, Iraq sign pact to boost trade ties
Focus on rural healthcare insurance
Three cos shortlisted for financial district project in Karnataka
Bajaj Allianz named lead insurer for RTPS 4th unit
Power situation likely to ease soon in AP
AP Commercial Taxes Dept sets Rs 8,800-cr target
Sop to garment units in AP
Plea to raise turnover bar for SSIs to Rs 10 cr
`Toddy crisis will blow over soon'
Madras varsity Senate House to get a facelift
Auto cos go for a rural drive
Review duty on newsprint: FICCI
Anna varsity inks pact with FAP
ADR, GDR funds for PSU share buys allowed
Nalco divestment: Strategic sale first, says Baijal
Taj GVK hopes to win ITDC hotel at Chandigarh
`Privatisation of sugar mills thru transparent bids'
EPF board meet today to discuss rate cut
Finance Ministry man to be EPFO trustee
Unilever seen gaining from FDI in tea
Lockouts overtake strikes in West Bengal
Global Business Plan contest
AP: Export target fixed at Rs 1,500 cr

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line