EPFO fixes 8.65% interest rate on PF deposits for 2016-17
Employees� Provident Fund Organisation (EPFO) on Monday fixed 8.65% rate of interest on provident fund deposits for the current fiscal
Employees’ Provident Fund Organisation (EPFO) on Monday fixed 8.65% rate of interest on provident fund deposits for the current fiscal for its over four crore subscribers as the Central Board of Trustees (CBT) of the EPFO met on Monday to decide on the interest rate to be provided for 2016-17.
It was speculated that retirement fund body would retain 8.8% rate of interest which would have left a deficit of Rs 383 crore, but the body wanted to utilise about Rs 409 crore surplus with it, which accrued after providing 8.8% rate of interest for 2015-16, say the experts.
The government was not willing to retain 8.8% rate of interest, trade union representatives raised strong objections to scuttle any such attempt and insisted on at least retaining the rate, if raising was not possible.
Labour ministry top officials were convincing finance ministry higher ups for retaining 8.8% rate for this fiscal to avoid any embarrassment.
The finance ministry had earlier this year decided to lower interest on EFF for 2015-16 to 8.7 per cent from the 8.8 per cent approved by the CBT headed the Labour Minister.
Labour ministry sources had said that retaining the rate was not tenable in this current lower interest rate regime.
“Interest rate for the General Provident Fund (GPF) has been brought down to 8 per cent for the October-December quarter of the current fiscal compared with 8.7% a year earlier. Even as there was a need to prune the rate, the EPFO eventually provided for 8.8% interest rate last fiscal. It is simply not possible at this juncture,” a source told Financial Express.