EPFO panel skirts proposal on 8.5% interest on deposits
This was agreed to by BN Rai, another member of the FIC and secretary, Bhartiya Mazdoor Sangh and said, “For the first time in history, the interest rate proposal was brought as a table item before the FIC. This is against ethics and without any details on income and liabilities, we cannot take a decision.”
Since the proposal on interest rates is crucial as it impacts the retirement savings of over 8.15 crore subscribers, the EPFO traditionally sends it to the FIC members well in advance of the meeting date to ensure a proper discussion.
But worried that it could receive flak for not proposing a higher return on PF deposits, the EPFO chose to place it at the last minute.
However an EPFO official said, “We had listed it as part of the agenda but could not send it before hand as the calculations took us longer than expected.” Trade union leaders had earlier pitched for hiking the return on PF deposits to 8.8 per cent, which would bring it at par with the interest rate offered by the Public Provident Fund (PPF).
The increased payout, they had argued, would be possible by using returns on inoperative accounts, which have deposits of around Rs 22,000 crore.
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