The government on Thursday announced that interest rate on Employees’ Provident Fund will be increased to 8.6 per cent for the current fiscal. The move is expected to benefit around five crore subscribers across the country.
Union labour minister Mallikarjun Kharge made the announcement in Rajya Sabha while replying to a debate on working of the labour ministry.
“The rates were brought down due to lower income (on investment in special deposit schemes). There is no question of minimum or maximum interest rates. We distribute it as per our revenue. Next time, it will be 8.6 per cent,” he said.
“The rate of interest on funds depend on the revenues. Since the money belongs to workers, the government does not intend to reap any benefit out of the fund and returns every penny for the welfare of the subscribers. Even if the interest rate is less, the money is kept in safe custody,” Mr Kharge said.
The Employees’ Provident Fund Organisation (EPFO) had brought down the rate of interest to 8.25 per cent. The EPFO had provided 9.5 per cent interest rate to its subscribers for 2010-11 after it found Rs1,731 crores surplus in its books of account.
In December, the financial advisory committee of the EPFO had recommended 8.25 per cent as the interest rate for the current fiscal.
It is understood that the interest rate was lowered last fiscal on the finance ministry’s recommendation that with the kind of returns, it was not possible to continue with the 9.5 per cent given in the year-ago period.
Mr Kharge stated that his ministry is actively taking steps to address issues related to labour and pointed out that the government has enacted laws to protect workers and provide them additional benefits like assured job, food and medicines.