Ambarish Mukherjee

New Delhi, Dec 6

TWO lakh subscribers of the Employees' Provident Fund Organisation (EPFO), who have retired since April this year, have not received interest till October because no interest rate has been decided yet.

The EPFO's Central Board of Trustees will meet again on Wednesday after its last month's meeting and is likely to decide on the interest rate payable for the current financial year. During the last few meetings the CBT had not been able to agree on the rate. Highly placed sources said that there would be strong efforts to hammer out differences at the coming meeting and declare at least an interim interest, like it was done last year.

The Rs 87 crore due to the subscribers is lying idle with the EPFO, officials said. Even an interim rate would clear this amount, they said.

The interim rate could be 8-8.5 per cent, sources said.

The trade unions are demanding 9.5 per cent interest, which is not affordable, according to official figures. EPFO's funds allow it to pay only around 8.5 per cent.

After the last meeting, Labour Minister and CBT chairman, Mr K. Chandrasekhar Rao had promised to take up the matter with the Prime Minister, Mr Manmohan Singh. The unions also, in a joint letter to the Labour Minister, had demanded 9.5 per cent interest. They demanded raising the interest on the Special Deposit Scheme and government bonds to help EPFO retain the interest rate at 9.5 per cent for 2005-06. The meeting will also deliberate on the investment of five per cent of the corpus into equities and mutual funds. It would also take up the annual report for fiscal 2004-05.

As per this year's annual report the organisation has recovered Rs 1,680 crore defaults and the annual receipt stood at around Rs 26,000 crore, while payout stood at around Rs 16,000 crore.

The organisation has added 12 lakh new subscribers during the year and settled 2 lakh claims.

(This article was published in the Business Line print edition dated December 7, 2005)
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