The Hindu Business Line : EPFO board to meet next week on interest rate

The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) will meet on December 7 to take a final call on the interest rate to be paid to the provident fund subscribers for 2006-07.

Prior to the CBT meeting, the Finance and Investment Sub-committee will meet on Monday to take stock of the fund's incomes and examine the resources available for paying interest for the current financial year.

Interest rate on provident fund has been steadily decreasing over the past few years. After paying 9 per cent during 2003-04 and 2004-05, the CBT had agreed to reduce it to 8.5 per cent in 2005-06 amid strong protests by the trade union leaders cutting across party lines.

Last year the fund had to dip into its resources to pay 8.5 per cent. This year too, the interest earnings of the EPFO fall short for maintaining last year's interest rate and as such the new Labour Minister, Mr Oscar Fernandes, had assured the trustees earlier that he would take up the matter with the Prime Minister to evolve ways of maintaining at least last year's level.

"The Finance and Investment Sub-committee would be meeting on Monday mainly to deliberate on the interest rate issue. As of now whatever seems to be available doesn't support the required interest liability," the CITU leader, Mr W.R. Varadarajan, who is a CBT member as well as member of the sub-committee, told Business Line.

In the last meeting held in October this year, the employers' representatives, the labour leaders and the EPFO officials had expressed their views following which the Labour Minister had deferred a decision on the interest rate issue and had announced that the trustees would meet again in December to take a final decision.

According to Mr Varadarajan, "The Labour Minister had said that he would try to make some arrangement. We will know soon."

The CBT meeting would also finalise the annual accounts of the EPFO for last fiscal and approve the organisations budget for next year, he said.

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