The Hindu Business Line : Unions demand 12 pc interest on PF savings

The AITUC general secretary, Mr Gurudas Dasgupta, with other trade union leaders, at a pre-budget meeting with the Finance Minister, Mr P. Chidambaram, in the Capital on Saturday. — Kamal Narang

New Delhi , June 5

LABOUR leaders on Saturday demanded that the rate of interest on provident fund be raised from last year's 9.5 per cent to 12 per cent annually along with retaining the retirement age for Government servants at 60 years.

They also asked for re-examination of the new pension scheme introduced by the erstwhile NDA Government.

In a pre-Budget meeting here with the Union Finance Minister, Mr P. Chidambaram, leaders from all the national trade unions demanded reversal of the NDA Government's decision to replace the benefit scheme by defined contribution for new entrants in Government service.

However, the trade unions (TUs) were not unanimous in their demand for a 12 per cent return on PF savings. While the Centre for Indian Trade Union Congress (CITU) demanded 12 per cent, the All-India Trade Union Congress (AITUC) asked to maintain it at least at the existing levels while the National Trade Union Congress (INTUC) only asked for a re-look into EPF's investment pattern.

The Employees Provident Fund Organisation (EPFO), which manages the EPF, had given a 0.5 per cent bonus interest in 2003-04 on the occasion of Golden jubilee of the organisation to retain the interest rate at 9.5 per cent. The return on investments last year could afford only a nine per cent rate of return on PF deposits.

According to a member of the board of trustees of the EPFO, the funds current situation does not provide for a 12 per cent rate of return.

However, the TUs have demanded that the Government subsidise the shortfall considering it as an expenditure on social security.

They also urged for increasing the income-tax exemption limit to Rs 1 lakh from the present Rs 50,000 and stringent action taken to recover outstanding dues of over Rs 87,000 crore.

The Finance Minister has assured the TUs that their concerns would be reflected in the current year's Budget.

But they urged him to introduce a Budget with a new direction to generate investor's confidence to encourage investments from the public and private sectors.

Speaking to presspersons after the meeting, the AITUC general secretary, Mr Gurudas Dasgupta, said that the other suggestions made by the TUs include broadening of the tax base, higher taxes from big corporate houses, private schools, professionals and big landlords.

The unions also demanded amending the present bonus ceiling and the minimum wages.

More Stories on : Trade & Labour Unions | Budget | Small Savings

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