Govt rolls back de­ci­sion on EPF rate, fixes it at 8.8%

Fin­min yields to pres­sure from trade unions protest­ing rate of 8.7%

The Financial Express - - ECONOMY - Surya Sarathi Ray

THE fi­nance min­istry has yielded to the pres­sure from trade unions by agree­ing to no­tify soon 8.8% rate of in­ter­est on the em­ploy­ees’ prov­i­dent fund (EPF) de­posits for 2015-16.

The move would bring cheers to EPF Or­gan­i­sa­tion’s around 5 lakh ac­tive sub­scribers and cen­tral trade unions who had de­nounced the fi­nance min­istry’s de­ci­sion to rat­ify the rate at 8.7%, de­spite the Cen­tral Board of Trustee’s (CBT) rec­om­mend­ing 8.8%.

A seem­ingly elated labour and em­ploy­ment min­is­ter Ban­daru Dat­ta­treya said, “I am happy that the fi­nance min­istry has agreed to 8.8% rate of in­ter­est for 2015-16. The rates will be no­ti­fied soon.”

This would be third roll- back by the fi­nance min­istry in mat­ters re­lated to EPFO in two months un­der the protest of the trade unions. Re­cently, it had with­drawn a pro­posal to tax on EPF and another on bar­ring with­drawal of em­ploy­ers’ con­tri­bu­tion to the EPF.

At 8.8%, the re­turns would be the high­est in three years. In the pre­vi­ous two fis­cals, EPFO had doled out 8.75% rate of in- ter­est to its sub­scribers. Rates were, how­ever, lower at 8.5% in 2012-13 and 8.25% in 2011-12. Gen­er­ally, CBT rec­om­mends the rate of in­ter­est to be ac­crued to EPF sub­scribers and the fi­nance min­istry rat­i­fies the rate for a par­tic­u­lar year.

Justifying the 8.7% rate of in­ter­est, the fi­nance min­istry had ear­lier said that the re­tire­ment fund body would leave with a sur­plus of around R1,000 crore for the year 2015-16, lower than R1,604 crore sur­plus it had in 2014-15, had it doles out 8.7% rate of in­ter­est. If of­fered 8.8% re­turns, the sur­plus would get fur­ther squeezed to just R674 crore.

The labour min­istry, on the other hand, were un­der tremen­dous pres­sure to stick to the CBT-rec­om­mended 8.8% rate from the trade unions in­clud­ing the RSS-af­fil­i­ated Bharatiya Maz­door Sangh (BMS). The labour min­is­ter is also the chair­man of the CBT. Trade unions on Fri­day went on a na­tion-wide protest against the fi­nance min­istry’s de­ci­sion.

BMS’ gen­eral sec­re­tary Vir­jesh Upad­hyay thanked prime min­is­ter, fi­nance min­is­ter and labour min­is­ter for “up­hold­ing the CBT de­ci­sion on EPF in­ter­est rate.”

At 8.8%, the re­turns would be the high­est in three years. In the pre­vi­ous two fis­cals, EPFO had doled out 8.75% rate of in­ter­est to its sub­scribers

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.