AFTER PROTESTS, GOVT RAISES EPF INTEREST RATE BACK TO 8.8%
NEW DELHI: The Centre rolled back on Friday a move to slash the employees provident fund ( EPF) interest rate, the third failed government attempt to tinker with retirement funds that act as a safety net for millions of Indians.
The finance ministry cut the interest rate to 8.7% on Monday, going against the recommendation of 8.8% by the Central Board of Trustees, the Employees Provident Fund Organisation’s apex decision-making body.
This triggered widespread discontent and trade unions announced a nationwide protest on Friday, criticising the “unilateral and undemocratic” action. “I am happy the finance ministry has agreed to 8.8% for 2015-16,” labour minister Bandaru Dattatreya said.
The EPF’s interest rate typically increases every year to help employees save more and fight inflation. The CBT approved 8.75% interest rate in 2013-14 and 2014-15, higher than 8.5% in 201213 and 8.25% in 2011-12.