Finance Ministry lowers the EPF Interest rates
New Delhi: The finance minister, Arun Jaitley, announced the cut in Employees Provident Fund interest rate to 8.7 per cent for the financial year 2015-16.
Overruling the decision of the Employees' Provident Fund Organisation (EPFO), the finance ministry, announced the ratification of the interest rates for EPF subscribers for 2015-16, on Monday.
The Central Board of Trustees(CBT) of EPFO recommended the 8.8 per cent interest rate for EPF.
What Ministers said:
- Labour Minister Bandaru Dattatreya wrote to Lok Sabha, on Tuesday, stating, "The CBT, at its meeting held in February, had proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of Employees' Provident Fund subscribers for 2015-16. The ministry of finance has, however, ratified an interest rate of 8.7 per cent."
- Labour Secretary Shankar Aggarwal, however, said that this decision has not been notified yet. “Ministry of Finance has communicated to us the interest rate of 8.7 per cent. We are awaiting the views of the EPFO on the issue,” he reportedly said.
Trade Union Unhappy:
- Trade unions were, naturally, unhappy with the decision, and accused the finance ministry of disrespecting the CBT.
- The trade unions also threatened to protest if the decision would not be withdrawn.
- According to regulations, if the interest rate is approved by CBT, it has to be approved by the finance Ministry.