A final decision on whether to retain the employees provident fund interest rate at 8.5 per cent or reduce it further will be taken next month when the EPF Board meets for the purpose.
The contentious issue of PF interest rates has been hanging fire for quite some time with the Left-backed trade unions pressurising the government not to cut down the interest any further. A decision on fixing the rate for 2006-07 was put off thrice earlier at the Board meetings as the government’s proposal to bring it down to 8 per cent was vehemently opposed by trade union representatives in the panel.
In its consultations with the Labour Ministry, the Finance Ministry had emphasised that only an 8 per cent PF interest rate was sustainable.In 2005-06, the rate was brought down by one per cent to 8.5 as against 9.5 paid that was being paid in the preceding years.
Labour Minister Oscar Fernandes indicated on Wednesday that the interest rates for 2006-07 and the current financial year would be finalised in the first or second week of May when the Board of Trustees meets.
“We have held many discussions with the Finance Ministry as well as the labour unions...We are now in the final stages of taking a decision,” he stated.
Though he avoided any direct reply on being asked about the probable rate of interest , the minister did emphasise that nowhere in the provisions of the EPF Scheme ,1952 was it laid down that the government would pay in excess of the yields on investments of the funds with the EPF.
Ministry officials pointed out that interest rates had declined in the market during the past four years and the government had been paying EPF members at a rate that was in excess of the percentage of yield on the fund investments since 2003-04.
Meanwhile, several important labour issues will be taken up for discussions at the two-day Indian Labour Conference (ILF) that will be inaugurated by Prime Minister Manmohan Singh on Friday.Among these will be strengthening of labour laws, Payment of Bonus Act, Contract Labour Act and measures to improve employability of youth.