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Monday, Jul 05, 2004

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EPF interest rates

This is with reference to "Decision on EPF interest rate deferred" (Business Line, July 1).

It has become rather customary that the interest rate on EPF is decided with some tussle year after year.

The rate of interest on EPF is, in fact, to be decided by the Central Board of Trustees (CBT), EPF and the Central Government is expected to declare the interest rate as decided by the CBT.

The CBT is a trust representing employees, employers and the Government, invested with the power to administer the Fund.

The intention of the legislators is very clear that the rate of interest should be decided by those who are administering the fund and not by the Government.

The Government is expected to give its formal assent and to notify it.

It is imperative that the decision on the interest rate should be left to the CBT to ensure that it is taken on scientific lines.

Interference of any political and populist considerations, if allowed, will make the administration of the Fund difficult and may lead to situations such as those faced by UTI recently.

C. Ramesh

Keeramangalam (TN)

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