Left Sees Sense On EPF Rates

New Delhi, July 28 | Updated: Jul 29 2004, 05:40am hrs
Trade unions (TUs) affiliated to the Left intend to climb down from their demand of 12 per cent interest rate on employment provident fund (EPF) to 9-9.5 per cent. The unions will meet on August 2 to take a united stand ahead of the next meeting of the central board of trustees (CBT) on August 9. Earlier, on three occasions when the CBT met, no consensus was forthcoming.

The government favours 8 per cent rate for the countrys three crore EPF subscribers. The Congress-affiliated Intuc is satisfied with an interest rate in the 8-8.25 per cent band.

Aituc secretary DL Sachdev said, Left trade union leaders would meet on August 2 so that we can present our combined stand to the government. We hope there would be consensus on the interest rate on August 9.

Other issues, like foreign direct investment, will also be discussed, but the focus would be on the interest rate on provident fund. Aituc is affiliated to the Communist Party of India.

Mr Sachdev did not commit on rate of interest. Other Left leaders said that they would be willing to negotiate a rate between 9 per cent and 9.5 per cent. They said that efforts are on at the political level as well to sort out the issue.

The RSS-affiliated Bharatiya Mazdoor Sangh is sticking to its demand of 12 per cent. BMS president Hasubhai Dave said, We feel that 12 per cent interest rate is justified and there is no question of dilution in our stand. I have also written a letter to labour minister Sis Ram Ola justifying our demand. The interest rate on August 9 would be decided by a majority decision since the BMS would not agree to anything below 12 per cent, he said. So far the convention has been for an unanimous decision.

Mr Ola had said after the CBTs meeting on July 20 that he would announce the interest rate for 2004-05 on August 9.

At present, the interest rate is 9.5 per cent. The investment and finance committee of the Employees Provident Fund Organisation (EPFO) is of the view that more than 8 per cent would not be sustainable.

SDS comprises 80 per cent of the EPFOs total corpus of Rs 1,28,000 crore.

According to the EPFO, offering 12 per cent would lead to a deficit of about Rs 2,729 crore and 9.5 per cent could leave an uncovered gap of over Rs 927 crore between interest earned and offered to its subscribers.

Finance minister P Chidambaram is of the view that the EPFO should decide matters on a self-sustainable basis.