Board of EPFO to meet for the fifth time
The Board would meet for the fifth time to take a decision on the rate of interest being paid on the provident fund of employees, reports Sutirtho Patranobis.business Updated: May 23, 2007 20:38 IST
On Sunday, the Central Board of Trustees of the Employees’ Provident Fund Organisation (EPFO) would be meeting for the fifth time to take a decision on the rate of interest being paid on the provident fund of employees.
While the trade unions are likely to reiterate their demand for increasing the interest to 9.5 per cent from the current 8.5 per cent, the Board is unlikely to entertain the request.
The Board recently circulated an agenda note for the meeting among Board members, which include representatives from the employees, employers, Centre and state governments.
Trade union sources said the agenda note highlighted the gains and losses that EPFO would make at particular rates of interest for two years, 2006-07 and 2007-08. The two possible rates of interest floated by the EPFO are 8 per cent for the first year and 8.25 per cent for 2007-08.
The gains and losses have been calculated according to the income and liabilities generated by the provident fund money. The money accumulated in the fund has largely been invested in central and state government securities and in the special deposit schemes.
"According to the calculations, for 2006-07, if the rate of interest is brought down to 8 per cent, the EPFO makes a surplus income of Rs 10.25 crore. Pegged at 8.25 per cent, the surplus would be transformed into a loss of Rs 219.82 crores. For 2007-08, an interest rate of 8.25 per cent would generate a surplus of Rs 3.54 crore. But at the interest rate of 8.5 per cent, losses would mount to Rs 263.78 crores," trade union sources said, adding that it implies that cut could be in the offing.
At the last meeting in March, all the central trade unions had opposed any cut in the interest rate. "The meeting had proved to be inconclusive. Labour Minister Oscar Fernandes had said that he would take our arguments to Prime Minister Manmohan Singh and Finance Minister P Chidambaram. But he did not get back to us after that," sources said.
The trade union leader said that all trade unions are unanimous this time as well about not accepting a cut. "The Board can take any decision with majority support. But we will mark our dissent and then decide on the mode of agitation," he said.