New Delhi: Union Labour Minister Santosh Gangwar has said that subscribers to the employees' provident fund would receive 8.65 per cent interest on their deposits for the year 2018-19.
Though the Central Board of Trustees -- the apex decision-making body of the Employees' Provident Fund Organisation (EPFO) -- had recommended increasing the interest rate to 8.65 per cent in February this year, the finance ministry had raised objections to the proposal. The interest rate for 2017-18 was 8.55 per cent.
Gangwar told reporters in New Delhi on Tuesday that over 6 crore EPFO subscribers would get 8.65 per cent interest for 2018-19 ahead of the festival season.
The finance department said in June that the increase in the interest rate would eat into the surplus funds of the EPFO. The department wanted rates to stay low to avoid losing the returns from the investments made in the Infrastructure Leasing and Financial Services Limited (IL&FS).
About Rs 1,700 crore from the EPFO has been invested in schemes under the public-private partnership.
The finance department faced criticism that it was merely echoing the bankers' concerns that high interest rates in the EPFO would hurt the banks at a time when bank rates were low. Trade unions also objected to the move to cut interest rates.
Even after the increase in interest rates, the EPFO would be left with Rs 151.67 crore in its surplus fund.