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Ambarish Mukherjee

Likely to recommend 8 pc for 2006-07

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New Delhi Jan. 25 The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation (EPFO) would be meeting on Saturday to decide on the interest rate payable to its subscribers for the current fiscal.

According to indications available from officials in the Ministry of Labour, a majority decision to recommend an 8 per cent interest for 2006-07 may be taken.

Ministry sources told Business Line that there is "no formal announcement being made about the meeting because of the uncertainties surrounding the possibilities of reaching a decision."

This is because the Finance Ministry has not agreed to fund the gap between the interest earned by the EPFO and the liability it has to meet to retain last year's pay out of 8.5 per cent.

The EPFO has a total corpus of over Rs 140 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.

Estimated yields

Officials said that, "As per rules, to recommend the rate for 2006-07 to the Government, the estimated amount in the accounts of the subscribers as on April 1, 2006 and the estimated yield from the investment holdings are taken into consideration.

For this investment holdings as on December 31, 2005 have been taken as the basis for making projections."

Further, the officials added, "To project the interest during 2006-07, the holdings at the beginning of the year are required. To arrive at this figure, the estimated increase in the corpus during January-March 2006 has been added to the December 2005 figures."

Related Stories:
EPF rate issue to go to PM
Govt notifies 8.5% interest rate on EPF for '05-06

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