EPF board to decide on interest rates

New Delhi: The Employee?s Provident Fund (EPF) board is meeting on Monday to decide on the rate of interest for this year.

The trade unions are demanding 9.5 per cent as rate of interest for this year. But if the board goes by the recommendations of its own committee it cannot pay more than 8 per cent.

Under intense pressure from trade unions the EPF board had given 9.5 per cent interest last fiscal, digging into its special reserve fund to make up for the shortfall.

"Last time EPF under pressure shelled out Rs 700 crore but there are norms under which you can utilise this money," Ravi Wig, EPF board member, said.

But the trade unions are up in arms, they want the board to continue paying 9.5 per cent interest on the subscribers? deposits and for this they want the government to chip in.

"Whether EPF has the requisite money or not is not the question, 70 per cent of the money is deposited with the government under the special deposit scheme," Gurudas Dasgupta, General secretary, AITUC, said.

Dasgupta further explained that the problems have emerged because of the low interest rates decided by the government.

But the government is in no mood to oblige the trade unions. Another matter to be discussed at the meeting will be the huge deficit, which EPF faces in its pension scheme.

The government has already refused to give subsidy and are totally averse to the board investing in the stock market.

In such a situation the EPF board will need a magic wand to give its subscriber 9.5 per rate of interest.