The Hindu Business Line : EPFO trustees to meet on March 10

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New Delhi March 7 The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) would be meeting on March 10 to decide on the interest rate payable to its subscribers for 2006-07.

However, according to CBT members, though interest rates are increasing and commercial banks too have raised long-term deposit rates to 9 per cent, EPFO members may get the benefits of higher interest rate only from the next financial year.

Additional Grants

In the last meeting held on the last week of January, the CBT members were unable to reach a consensus and had authorised the Union Labour Minister, Mr Oscar Fernandes, to take up the issue with Finance Minister for additional grants required to retain atleast last years' interest rate of 8.5 per cent.

According to EPFO's estimates, in order to pay 8.5 per cent interest for the year 2006-07, the total liability would stand at Rs 7,822.57 crore while its interest earning during the year would be Rs 7,372.67 crore, leaving a gap of Rs 499.90 crore. EPFO has a total corpus of over Rs 1,40,000 crore, of which around Rs 84,258 crore is in the employees provident fund account, while the remaining amount is under the employees pension scheme. The funds are invested in permitted securities according to the guidelines set by the Ministry of Finance.

According to Mr Sanjeeva Reddy, President of the Indian national Trade Union Congress and a member of the CBT, "It is clear that the Government is not prepared to give any funds. And since bank interest rate have also gone up we will have to see that for next year at least the workers should get 9 per cent interest on their provident fund deposits."

Majority Decision

However, before the CBT meeting scheduled for Saturday the trade unions would be meeting among themselves to deliberate on whether to settle for 8 per cent interest for the current financial year or to pursue their demand for 8.5 per cent.

If the trade unions continue with their demand for 8.5 per cent, the Union Labour Minister, who is the CBT chairman, will be entitled to go by majority decision. Last year also the CBT had gone by majority decision with note of protest by the labour leaders. "In the meeting of the trade unions we would try to work out a combined stand," Mr Reddy said.

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