Interest rate on provident fund cut to 8.5% for this year, says labour minister
The rate of interest on the employees’ provident fund has been lowered to 8.5% for the current financial year, announced labour minister Santosh Gangwar.
The EPFO had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the Employees’ Provident Fund Organisation’s (EPFO) apex decision making body -- the Central Board of Trustee.
“The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting today,” Gangwar told reporters after the meeting here.
Now, the labour ministry requires the finance ministry’s concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal.
“We have surplus but keeping everything in mind, we have decided to pay 8.5% Interest rate,” Labour minister Santosh Gangwar said.
The EPFO will have a surplus of Rs 700 crore after paying out 8.5% interest.
The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes.
The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.
It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.