FinMin stumps all, declares PF rate of 8.7%

Our Bureau New Delhi | Updated on January 20, 2018 Published on April 25, 2016


Provident fund deposits of over six crore members of retirement body EPFO will earn an interest of 8.70 per cent for 2015-16, the Finance Ministry has declared. The move is a rare rejection of the recommendation of the Central Board of Trustees, which had proposed an interim rate of 8.80 per cent in February.

Labour Minister Bandaru Dattatreya told the Lok Sabha in a written reply on Monday that the Finance Ministry had ratified an interest of 8.70 per cent.

Labour Ministry officials and trade unions had expected a rate higher than 8.80 per cent. Last month, a Labour Ministry official had told BusinessLine that “with a surplus of about ₹1,000 crore, a final return at a higher rate could be announced”.

Sources said North Block was keen to keep the PF return in sync with the recent reset of rates for popular small savings schemes, such as PPF and Kisan Vikas Patra that are now aligned to G-sec yields of the previous quarter. In a February meeting, trade unions had unanimously demanded a rate of at least 8.90 per cent.

Trade unions flay move

AK Padmanabhan, CBT member and President of Centre of Indian Trade Unions said the Finance Ministry’s decision was “condemnable”. M Jagadhishwara Rao, CBT member and national vice-president, Bharatiya Mazdoor Sangh said they would organise a nation-wide protest on April 27.

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Published on April 25, 2016
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