The Hindu Business Line : EPF rate

The stiff resistance to the decrease in the rate of interest for the Employee Provident Fund (EPF) proposed by the Finance Minister can be countered to some extent by considering the following suggestion.

The market conditions in the country in the investment arena are well controlled and under strict vigilance by the Government.

The rate of return on the investment of an individual is generally above 10 per cent and it touches a much higher rate at times for some instruments. So the salaried employees should have the option of investing in the private market for higher returns, which rarely becomes risky.

In order to give the choice to the salaried class contributing to EPF, the Government can frame a rule that any employee can withdraw a certain percentage — say, 15 per cent of the balance at credit in his/her EPF account — once in three years.

The eligible minimum period for applying for optional withdrawal shall be three years since the commencement of the EPF account or the last withdrawal under this provision. The employee need give no reason for withdrawal.

This will not only reduce the total burden of interest on the balance payable periodically by the Government, but also the bulk amount to be paid out on retirement of the employee.

M. P. Sankaranarayanan

Secunderabad

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