NEW DELHI: In a move expected to benefit over 5 crore people, the government on Thursday announced that the interest rate on employees' provident fund will be increased to 8.6% for the current fiscal. The Employees' Provident Fund Organization ( EPFO) had in March brought the interest down to 8.25% for 2011-2012 from 9.5% in 2010-2011.
The cut in interest rate had led to vociferous protests from political parties, trade unions and employees who depend on the scheme for their retirement benefits. "The rates were brought down due to lower income (on investment in Special Deposit Schemes).There is no question of minimum or maximum interest rates. We distribute it as per our revenue. Next time, it will be 8.6%," labour minister Mallikarju Kharge said in the Rajya Sabha.
The retirement fund body has invested more than Rs 55,000 crore in the Special Deposits Schemes (SDS) aimed at providing better returns to non-government provident funds. Kharge said the rate of interest on funds depend on the revenues. Since the money belongs to workers, he said, the government does not intend to reap any benefit out of the fund and returns every penny for the welfare of the subscribers.
The SDS was started in 1975 to ensure better returns for non-government provident fund, superannuation and gratuity funds. "Even if the interest rate is less, the money is kept in safe custody," Kharge said. According to the government, the interest rate was lowered last fiscal on the finance ministry's recommendation.
The cut in interest rate had led to vociferous protests from political parties, trade unions and employees who depend on the scheme for their retirement benefits. "The rates were brought down due to lower income (on investment in Special Deposit Schemes).There is no question of minimum or maximum interest rates. We distribute it as per our revenue. Next time, it will be 8.6%," labour minister Mallikarju Kharge said in the Rajya Sabha.
The retirement fund body has invested more than Rs 55,000 crore in the Special Deposits Schemes (SDS) aimed at providing better returns to non-government provident funds. Kharge said the rate of interest on funds depend on the revenues. Since the money belongs to workers, he said, the government does not intend to reap any benefit out of the fund and returns every penny for the welfare of the subscribers.
The SDS was started in 1975 to ensure better returns for non-government provident fund, superannuation and gratuity funds. "Even if the interest rate is less, the money is kept in safe custody," Kharge said. According to the government, the interest rate was lowered last fiscal on the finance ministry's recommendation.
0 comments:
Post a Comment