New Delhi: With over 40 crore subscribers across the country, the employees provident fund or EPF is acknowledged as one of the safest savings instrument for the Indian salaried class.
Thursday's meeting of the provident fund trustees has been deferred following former President K R Narayanan's death. But the interest rate for this year will be decided soon and a tussle with trade unions seems likely.
Employees who benefit from the EPF may soon see a change in the interest they earn.
The provident fund trustees have decided to organise a meeting to fix the rate of interest for this year. Trade unions want 9.5 per cent like last year, but around 8 per cent is what they might get. This is so because the special reserve is near empty.
Trade unions do not buy that. If the provident fund cannot pay, 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 Special Deposit Scheme," Gurudas Dasgupta, General secretary, AITUC, said.
Dasgupta said the problems started after the government reduced the interest rate and added that the interest rate should be increased for the benefit of 4 crore subscribers.
The Finance Ministry is in no mood to oblige and another matter to be discussed in the meeting will be the huge deficit, which EPF faces in its pension scheme.
Unlike last year the EPF board will not be able to dip into its special reserve fund to give 9.5 per cent rate of interest to its subscribers.
The government has already refused to give subsidy and though the left leaders are asking for 9.5 per cent rate of interest they are totally averse to the board investing in the stock market.
In such a situation the EPF board will need to take drastic measures to give its subscriber 9.5 per cent rate of interest.
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