April 16, 2017 by Prakash
Malankar
The Finance Ministry is believed to
have permitted the Labour Ministry to go ahead with 8.65 per cent rate of
interest on employees’ provident fund (EPF) for 2016-17, which will benefit
over four crore EPFO members.
The Finance Ministry in its
communication to the Labour Ministry has, however, put a rider that the
interest rate should not result in a deficit for the retirement fund. This will
enable the Labour Ministry to provide 8.65 per cent rate as decided by the
Employees’ Provident Fund Organisation (EPFO) trustees.
According to EPFO estimates, the
fund will see a surplus after providing 8.65 per cent interest rate for the
last fiscal.
A reluctant Finance Ministry had
been nudging the Labour Ministry to lower the EPF rate to below 8.65 per cent
as approved by the EPFO trustees in December last year.
“The Finance Ministry in its
recommendation to the Labour Ministry said it is up to the latter to decide on
what interest rate should be given. However, it should be ensured that there
should not be any deficit to the fund,” according to a source.
“The Finance Ministry had earlier
suggested an EPF rate slightly lower than approved by the trustees as it wanted
the interest to be aligned with the rates of small savings,” added the source.
Labour Minister Bandaru Dattatreya
has been maintaining that the EPFO subscribers would be provided 8.65 per cent
rate of interest for 2016-17.
“The Central Board of Trustees (CBT)
had decided to give 8.65 per cent. Our ministry keeps on discussing with the
Finance Ministry. We would have surplus of Rs 158 crore on providing 8.65 per
cent,” Dattatreya had said earlier last week when asked whether the Finance
Ministry is making a case for lowering the interest rate.
“If need be, I will talk to them
(the Finance Ministry). I have requested them to approve 8.65 per cent. In any
case this amount (interest income) will be given to workers,” the minister had
said.
As per the practice, the board’s
decision is concurred by the Finance Ministry after evaluating whether the EPFO
would be able to provide the rate approved by trustees through its own income
or not.
Source: TOI
No comments:
Post a Comment