The Hindu Business Line : EPF board retains 8.5% rate for 06-07

Fund of activity
8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund
The deficit could be offset from a surplus of Rs 590.16 crore
The Government’s suggestion to invest 5 per cent of the corpus in stocks taken up.

Ramesh Sharma

Final decision: The Union Labour Minister, Mr Oscar Fernandes (right), with the Central Provident Fund Commissioner, Mr A. Viswanathan, briefing presspersons in New Delhi on Monday. —

Our Bureau

New Delhi, July 23 After a number of inconclusive meetings over the last few months, the Central Board of Trustees (CBT) of the Employees Provident Fund (EPF) today agreed to continue paying 8.5 per cent interest rate on provident fund contributions for 2006-07.

“Amid protest by some trade union representatives, it has been decided to pay 8.5 per cent interest rate on provident fund,” the Minister of State (Independent Charge) for Labour and Employment, Mr Oscar Fernandes, said after the meeting.

The decision to retain 8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund, but Mr Fernandes said that the deficit could be offset from a surplus of Rs 590.16 crore lying in the Interest Suspense Account, Contingency Reserve and Special Reserve Fund.

The board is expected to submit its recommendations to the Finance Ministry, which is expected to notify the rate shortly. Mr Fernandes also said that the EPF had constituted a sub-committee to assess the board’s finances. The report of the committee placed before the meeting for deliberation found that there would be a surplus of Rs 595 crore with the board.

“Even after paying 8.5 per cent interest rate, the fund would be having a surplus of Rs 83 crore while leaving aside Rs 56.69 crore in the Special Reserve Fund,” Mr Fernandes said.

No decision

The CBT is understood to have also discussed the Government’s suggestion to invest 5 per cent of the corpus in the stock market but no decision was taken.

Referring to the demand of trade unions to pay higher interest rate, Mr Fernandes said, “The board had fixed interest rate only for the previous year and since the bank rates have gone up mainly this year, the board can consider revising interest rate for 2007-08 later.”

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