The Hindu Business Line : Decision on EPF interest rate deferred again

THE crucial meeting of the Central Board of Trustees (CBT) of the Employees' Provident Fund Organisation (EPFO) held here on Tuesday to finalise the rate of interest payable on EPF deposits for the current financial year ended inconclusive with a section of labour leaders refusing to accept a reduction from last year's 9.5 per cent.

It has been decided that the CBT will meet again next Tuesday to deliberate on the issue. Meanwhile, the trade union leaders have sought an appointment with the Prime Minister on this issue.

The Left leaders urged the Union Labour Minister, Mr Sis Ram Ola, who is the Chairman of the CBT, to lead a labour delegation to the Prime Minister on this issue.

In a joint letter signed by the CITU, the AITUC, the HMS and the UTUC-LS after the meeting was over, the trade unions urged Mr Ola "to kindly arrange to lead a delegation of the CBT to meet the Prime Minister for resolving this issue through his good offices.

In today's meeting, which continued for almost more than three hours, there were serious differences of opinion among the trade unions. Sources said that while the Congress-affiliated INTUC was agreeable to 8.25 per cent and insisted for an announcement to the effect, the Left trade unions rejected the idea.

According to estimates made by the EPFO, if interest is paid at eight per cent, then EPFO will have a surplus of Rs 156 crore. If it is pegged at 8.25 per cent, the shortfall is Rs 26 crore. At 8.5 per cent interest, the EPFO's shortfall would stand at Rs 206.45 crore while for paying nine per cent interest the deficit would climb to 566.80 crore.

If the interest rate for 2004-05 is pegged at last fiscal's 9.5 per cent, the shortfall amounts to Rs 927.15 crore. If one considers the Leftists trade unions initial demand of 12 per cent interest, the EPFO's shortage reaches an whopping Rs 2,728.87 crore.

A proposal on whether differential interest rates can be introduced on the basis of EPF Act's gross income ceiling level of Rs 6,500 had also come up for discussion but was ruled out because of legal complications.

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