Government’s higher PF rate to benefit 6 crore employees
In a good news for the salaried people ahead of the festival season, labour minister Santosh Gangwar on Tuesday said over 6 crore EPFO members will get 8.65 per cent interest on their deposits for 2018-19 as compared to the current 8.55 per cent.
“...ahead of the festival season, over 6 crore EPFO subscribers would get 8.65 per cent interest for 2018-19,” Gangwar told reporters on the sidelines of a function in New Delhi. At present, the EPFO is settling PF withdrawal claims at 8.55 per cent interest rate, which was approved for 2017-18.
The announcement was preceded by differences over the rate between the labour and the finance ministry. The matter was resolved after Gangwar recently met finance minister Nirmala Sitharaman and explained that the organisation is left with a sufficient surplus even after paying 8.65% interest rate to its 46 million subscribers, an official said requesting anonymity.
The EPF interest rate is determined by Central Board of Trustees (CBT), which is the apex decision-making body and the same is notified by the labour ministry after taking concurrence of the finance ministry. In a meeting of CBT on February 19, the trustees decided on a rate of 8.65% for FY-19 but the finance ministry wanted EPFO to cut the rate by at least 10 basis points. The government could not notify the rate because of the finance ministry’s objection, which led to the delayed disbursal of interests in subscribers’ accounts by almost five months, the officials said.
The interest rates on EPF are substantially higher than that of similar government schemes. The finance ministry last month slashed interest rate on General Provident Fund (GPF) and other similar funds to 7.9% for the quarter ending September 30, 2019, as compared to 8% offered to government employees in the previous quarter.