The finance ministry will notify the interest rate of 8.7% for employees’ provident fund (EPF) subscribers for the 2015-16 fiscal despite concerns raised by the labour ministry.
As reported earlier, North Block had, notwithstanding the EPFO’s Central Board of Trustee’s (CBT) recommendation of 8.8% return for EPF subscribers, decided to offer them only 8.7%.
“The finance ministry’s decision is likely to prevail for two reasons. First, the labour ministry does not want any confrontation with it as that will send a wrong message and secondly, the declining trend of interest rates which the EPFO has to fall in line with,” a senior labour ministry official said.
In addition, after providing 8.8% return to its five crore active subscribers, the EPFO would not have much surplus left to maintain a relatively uniform rate in coming years, which is not desirable, the official said.
The EPFO had doled out 8.75% rate of interest to its subscribers for their savings in PF in the previous