The Hindu Business Line : EPFO told to recover arrears to meet Rs 206-cr shortfall

THE Union Labour Ministry has asked the Employees Provident Fund Organisation (EPFO) to intensify the drive to recover provident fund arrears to meet the shortfall of Rs 206 crore at the current rate of 8.5 per cent. The Ministry, it is learnt, will propose revision of rates above 8.5 per cent depending upon the recovery.

Though not sure about restoration of the 9.5 per cent interest rate, the Ministry is confident that 8.5 per cent can be maintained in the medium term.

The Union Labour Minister, Mr Sis Ram Ola, said that the primary task before his Ministry was to meet the shortfall of Rs 206 crore even after lowering of the interest rates. "We have to recover it or else the PF corpus will be reduced," he told newspersons on the sidelines of a Federation of Indian Chambers of Commerce and Industry seminar here on Saturday.

Mr Ola, however, maintained that the 8.5 per cent was an "interim rate" and that the Government would review the scope of restoration of the old rate at the end of this fiscal. "The Ministry of Finance is yet to ratify the payments of 2003-04 at 9.5 per cent," he said.

According to Ministry sources, all-round efforts were being made to clamp down on provident fund defaulters. Recoveries of arrears and other dues were on an uptrend since 2002-03 and the Ministry was hopeful that the current shortfall would be recovered.

However, higher realisations are unlikely to bring down the total PF arrears. According to data available with the EPFO, despite registering a realisation of Rs 855 crore in arrears and dues in 2002-03, the total arrears had gone up from Rs 1,336 crore to Rs 1,511 crore.

While realisation from the exempted sector matched fresh accretion, the EPFO had failed to keep a check on the mounting arrears in the non-exempted sector. From Rs 953 crore in 2001-02, the defaults had gone up to Rs 1,125 crore in 2002-03.