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Ambarish Mukherjee

It's likely to be reduced to 8%

New Delhi , Dec. 6

The Central Board of Trustees (CBT) of the employees' Provident Fund Organisation (EPFO) will meet here on Thursday to decide on the rate of interest to be paid to the nearly four crore provident fund subscribers for fiscal 2006-07.

According to indications available from the trustees, the Labour Minister as the Chairman of the board would go by the majority decision and is likely to reduce interest rate to 8 per cent from 8.5 per cent paid in 2005-06. Last year too the interest rate was cut from the earlier level of 9.5 per cent.

The Finance and Investment sub-committee of the CBT met here on Monday to review the available and distributable resources for paying this year's interest. According to a member of the subcommittee, "the resources do not support paying 8.5 per cent. But 8 per cent is maintainable. Even then we would have a very small amount left in our hand."

Majority Opinion

According to sources, the employers' representatives and the Government representatives on the CBT are expected to recommend a reduction while the trade unions would demand higher rates.

Since the employers' representatives and the Government representatives together outnumber the employees' representatives, the Minister is expected to go by majority opinion.

According to one of the members of the finance and investment subcommittee and a Left party leader, "Now everything is ready and the Minister has to take a view. In the last meeting, he had heard from all concerned and what is left is only a sort of formal announcement."

Related Stories:
EPFO board to meet next week on interest rate
Govt notifies 8.5% interest rate on EPF for '05-06

More Stories on : Interest Rates | Social Security | Policy

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