EPFO keeps interest rates on provident fund deposits unchanged at 8.5 per cent for 2020-21
The Employees Provident Fund Organisation (EPFO) announced on Thursday the interest rate on provident fund deposits for the financial year 2021-21 will remain unchanged at 8.5%. The EPFO’s central board of trustees held a meeting in Jammu and Kashmir’s Srinagar and decided to maintain the 8.5% interest rate after examining earnings and financial positions, two board members told HT’s sister publication Mint.
The state-run retirement fund manager’s decision comes in the backdrop of the widely anticipated savings metric of the middle-class unchanged from the previous year.
The announcement also comes after several reports had hinted that the central body, which has over 50 million active subscribers, would lower the interest following more withdrawals and relatively and lesser contribution by members due to the coronavirus pandemic.
The interest provided by EPFO on provident funds was 8.55% in 2017-18, 8.65% in 2016-17 and 8.8% for the fiscal year 2015-16. The retirement fund manager gave 8.75% rate of interest in 2013-14 as well as 2014-15, higher than 8.5% for 2012-13. It had provided an 8.25% cent rate of interest on provident fund in 2011-12.
According to the latest report released by the National Statistical Office (NSO), net new enrolments with retirement fund body EPFO stood over 1.25 million in December, up from 870,000 in November 2020.
“The data reflects an increase of 44 % in net subscribers’ addition over the previous month of November 2020. A year-on-year comparison of payroll data shows 24% growth for December 2020, indicating a return to the pre-coronavirus disease (Covid-19) levels of subscriber growth for EPFO,” the labour ministry had said in a statement.
According to the ministry, the increase in subscribers was partly because of initiatives taken by EPFO to ensure uninterrupted service delivery along with the policy support for formalising the economy via central government including the Aatmanirbhar Bharat Rojgar Yojana (ABRY), Pradhan Mantri Garib Kalyan Yojana (PMGKY) and the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).
The NSO report titled 'Payroll Reporting in India: An Employment Perspective - December 2020' was based on the payroll data of new subscribers of various social security schemes run by ESIC, EPFO and the Pension Fund Regulatory and Development Authority (PFRDA).