Click to play videoNew Delhi: Bowing to pressure from Left-backed trade unions, the Employees Provident Fund Board has agreed to continue paying 8.5 per cent interest rate to its nearly four crore subscribers for fiscal 2006-07.
The Board will submit its recommendations to the Finance Ministry, which is expected to notify the rate shortly.
The EPF board at its last meeting on the May 27 had decided to have a fresh look at the matter on the second of July, but that meeting was later called off
Labour Minister Oscar Fernandes said earnings were bound rise next year as bank rates have gone up in the last financial year. "Amid protest by some trade union representatives, it has been decided to pay 8.5 per cent interest rate on provident fund," he said.
The decision to retain 8.5 per cent interest will put a burden of Rs 450 crore on the EPF fund.
However, sources said that the deficit could be offset from a surplus of Rs 590 crore lying in the Interest Suspense Account, Contingency Reserve and Special Reserve Fund.
The Board will submit its recommendations to the Finance Ministry, which is expected to notify the rate shortly.
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