The Hindu Business Line : `Interim' EPF rate

This refers to `"Interim' EPF interest rate pegged at 8.5 pc" (Business Line, August 10). The assurance by the Labour Minister, Mr Sis Ram Ola, that the reduced interest rate on Provident Fund is only `interim' and will be reviewed after considering the recovery till September, is only a pacification.

The provisions of the Employees Provident Fund Scheme clearly provides that the cost of interest accreditation should be met from the Interest Suspense Account (ISA) only. ISA holds the returns on investment earned by the Employees Provident Fund Organisation.

The contributions received from the employers do not go into this, but to the respective contribution account. Thus, the arrears due from the employers, even if collected till September, will go the contribution account and not to the ISA.

The Labour Ministry, instead of giving unviable assurances, should concentrate on increasing the return on investment of the Employees Provident Fund Organisation.

C. Ramesh

Keeramangalam (TN)

***

It is a pity that the Government could not decide to pay the EPF interest at least at 9.5 per cent, the rate in the last fiscal, fixed by the NDA regime after including half per cent bonus.

The Left-controlled trade unions, especially CITU and AITUC, would definitely be in a fix over the issue and may be forced to follow suit as a strategic balancing measure.

In all, the employees find themselves deprived of the interest benefit they enjoyed amidst the mounting inflationary trends.

The Government would have offered at least 9 per cent, the rate offered to the new deposit scheme for the senior citizens, by subsidising half per cent.

The avenues of more gainful deployment of EPF funds seem to be still in the cards of EPFO and, perhaps, a more viable package may come out of negotiations between the central trade unions and the EPF board in the coming days.

Meanwhile, the Government can still explore the possibilities of bringing professional investment skills to the board to consider prudent investments to generate more income, without tampering with the interest of the subscribers.

C. P. Velayudhan Nair,

Kochi

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

C. Ramesh

Keeramangalam (TN)

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