Financial Daily from THE HINDU group of publications
Tuesday, Jul 09, 2002
Industry & Economy - Small Savings
EPF board meet today to discuss rate cut
NEW DELHI, July 8
THE Central Board of Trustees (CBT) of the Employees Provident Fund (EPF) organisation will be meeting here tomorrow to take a final view on Finance Ministry's persistent stance on effecting a 50 basis point cut in the interest rate credited to EPF subscribers on their monthly balances during 2002-03.
While the CBT has so far stuck to its position to retain the interest rate of 9.5 per cent on EPF deposits, amidst stiff opposition from the Finance Ministry, the issue is likely to be clinched at tomorrow's meeting, which will be chaired by the new Labour Minister, Mr Sahib Singh Verma.
Indications are that the latter may adopt a more `flexible' approach, unlike his precedessors, Mr Sharad Yadav and Dr Satyanarayan Jatiya.
The CBT is also expected to clear the introduction of a new Multi-Benefit Employees Insurance Scheme for EPF members who have been laid off on account of companies `right-sizing' their workforce.
The Board would consider amending the EPF and Miscellaneous Provisions Act, 1952 to convert the existing Employees Deposit Linked Insurance Scheme, 1976 to the new scheme, under which any employee who loses his job will be entitled to a monthly unemployment insurance benefit.
The benefit would cover a specific period, subject to graded rates linked to age and membership tenure.
An Executive Committee, constituted by the CBT, has recommended that the scheme be funded through contributions by the employer (1.25 per cent of wages) and employee (0.5 per cent of the wage), with the Government also chipping in with a minimum 0.25 per cent contribution.
This would ensure that a laid-off member would receive at least 50 per cent of his last drawn wages for one year.
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