Following sharp differences, the Employees' Provident Fund Organisation (EPFO) has asked the Finance Ministry to fix the interest rate on deposits for the year 2011-12 “as soon as possible”.
The Central Board of Trustees of the EPFO, comprising Government, employer and employee representatives, failed to reach any decision on the rate at its meeting here on Friday.
“The Finance Sub-Committee wanted 8.25 per cent, the employers suggested 8.5 per cent, and the unions insisted on the present 9.5 per cent. Since there was difference of opinion, we have asked the Finance Ministry to decide,” the Union Labour Minister, Mr Mallikarjun Kharge, said.
“The economic situation was different last year, so we could pay 9.5 per cent due to higher surplus,” the Minister added.
But, employee unions as well as employers said the Government should not “wash its hands” off a social security scheme affecting close to 5 crore subscribers.
High inflation
“Inflation is high and input costs are rising. As employers we are also facing problems. But it is for the Government to find a way out. As it is, high inflation is cutting into the 9.5 per cent returns for workers,” Mr Ravi Wig, President, Council of Indian Employers, said.
Mr B.N. Rai, General Secretary, Bharatiya Mazdoor Sangh, said “The EPFO could dip into the Rs 14,915 crore lying in inoperative accounts and are yielding returns.”
Citing technical glitches in using these funds, Mr Kharge said “We can decide only after March 31, as many people will start withdrawing or may move the courts.”
With elections round the corner in five States, trade unions are hopeful of a 9.5 per cent rate of return this year.
“The UPA Government cannot afford to take any unpleasant decision that will affect workers who are already facing inflation, job cuts and falling incomes. After all, this is a social security scheme,” said Mr Dipankar Mukherjee, Secretary, CITU.