The government on Tuesday increased interest rates on provident fund (PF) to 8.8 per cent for the ongoing financial year ended March 2016 from 8.75 per cent earlier.
EPFO has been paying 8.75 per cent interest rate for the last two fiscals to its 5 crore organised sector subscribers.
“PF interest rate is hiked to 8.8 per cent for 2015-16 from existing 8.75 per cent,” said Labour Minister Bandaru Dattatreya on Tuesday. “We had last time given 8.75 per cent and this time, seeing the situation, we are declaring 8.8 per cent for the workers,” he told reporters after chairing the 211th meeting of the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO).
The trade unions had demanded that the interest rate be fixed at 8.90 per cent, the government had revised it to 8.80 per cent, he said, underlining the Centre’s commitment to the working class.
EPFO provides the rate of interest from its earnings on investment on formal sector workers’ fund without any assistance from the government. The income projection of the retirement fund body is upwards of Rs 34,844 crore for the current fiscal. At this, EPFO would not have any problem to raise the rates to even 9% considering that it would still have Rs 100-odd crore surplus.