Thursday, April 26, 2012

EPF interest rate will be raised to 8.6% this year: Government

New Delhi: Interest rate on employees provident fund will be increased to 8.6 per cent for the current fiscal, a move that will benefit about five crore subscribers. "The taxes were dropped because of low incomes (on investment in special tank schemes) ... There is no question of a minimum or maximum interest rates. We distribute it according to our income. Next time, it will be 8.6 percent," labor minister Mallikarjun Kharge said in the Rajya Sabha replying to a debate on the working of the labor ministry.

The Employees' Provident Fund Organisation (EPFO) brought down the rate of interest at 8.25 percent for 2011-12 from 9.5 per cent provided in 2010-11. The retirement fund body EPFO has already parked in excess of Rs 55,000 crore in the special deposit scheme (SDS) aimed at providing better returns to non-government provident funds and other such funds.

Kharge said the rate of interest on the funds depends on the income. Since the money belongs to workers, the government does not intend to reap any benefit from the fund and returns every penny for the welfare of the subscribers.

"Even if the interest is less, the money is kept in safe custody," Kharge said. The interest was reduced last fiscal on the finance ministry's recommendation that with such a return, it could not continue with the 9.5 percent given in the year-ago period. Affirming that his ministry takes pro-active steps to address issues related to work, Kharge said, the government passed laws to protect workers and provide them additional benefits as a secured job, food and medicines. On pending bills, he said, "Once upon a time, we can not proclaim good laws due to differences. Without cooperation, no decision can be taken."


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