Retirement fund body EPFO is likely to fix higher interest on PF deposits for 2015-16 than 8.75 per cent provided in last two fiscals, in the retirement fund body’s trustees’ meeting in January, Labour Minister Bandaru Dattatreya said today.
The Employees’ Provident Fund Organisation has been providing higher rate of interest on provident fund deposits since 2013-14.
“There is a possibility of giving higher rate of interest this year (2015-16). Our talks with Finance Ministry on the issue are on,” Dattatreya said after the meeting of the EPFO’s apex decision making body – the Central Board of Trustees (CBT).
“I will discuss the issue with Finance Minister Arun Jaitley and will likely announce the interest rate at the next CBT meeting to be called in January,” the minister said.
He referred to rate cuts by the Reserve Bank while talking about the issue of fixing rate of interest.
Finance Ministry wants EPPO to retain the 8.75 per cent interest rate for the current fiscal and is expected to reduce rate of return on its small saving schemes and PPF.
A source said that the Finance Ministry is doing all these efforts to nudge banks to cut their lending rate so that cost of borrowing comes down for industry as well as consumer for boosting economic activity.
Today’s meeting of CBT was called to discuss the restructuring of the retirement body.
The minister informed that he has constituted a sub-committee of CBT members headed by an additional secretary of Labour Ministry to provide input on the issue.
He also said that the committee will give its report in next 15 days and then the CBT will deliberate on it.
However, the minister said that in view of the Pay Commission’s report the recommendations of the committee will be implemented from December 9, 2015.