The Hindu Business Line : EPF rate issues

This refers to the editorial `EPF mismatch' (Business Line, May 3). Prime Minister Dr Manmohan Singh and Deputy Chairman of Planning Commission Mr Montek Singh Ahluwalia, and Finance Minister Mr Chidambaram had announced a 1 per cent hike in the EPF rate to 9.5 per cent. However, the Finance Ministry made it clear that it was for the EPFO to find ways and means to cover the shortfall estimated at about Rs 927 crore.

The announcement by Mr Chidambaram was made on the same day that the Government approved foreign direct investment (FDI) to the extent of 74 per cent in the telecom sector.

The question is: What will be the plight of the exempted establishment? If they fail to match the interest rate offered by EPFO the exemption will stand automatically cancelled.

In order to make EPF & MP Act, 52 a well-balanced Act, EPFO should bring down the standard simple interest rate (12 per cent) on par with EPF rate of interest, whenever the employers of private concern fail to remit the PF and allied dues within the due date.

V. Sundaralingam

Vellore

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

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