Kharge hopeful of nod for 9.5% interest on PF deposits in FY11

Bangalore, Feb 4 (PTI)Amid Finance Ministry''s reservationon giving 9.5 per cent interest on PF deposits, LabourMinister M Mallikarjun Kharge today expressed hope of gettingthe nod to provide this rate of return to subscribers for thisfiscal.

"I hope, we will be able to persuade the Finance Ministryto give its nod for the decision of the Central Board ofTrustees (CBT) to increase the rate of interest on EPF from8.5 per cent to 9.5 per cent for 2010-11. I hope the FinanceMinistry will agree to it," he told reporters here.

Headed by the Labour Ministry, CBT is the apex decisionmaking body of the retirement fund manager, the Employees''Provident Fund Organisation (EPFO).

CBT decided to give 9.5 per cent interest on PF for2010-11 at its meeting on September 15.

The decision was taken by the EPFO trustees on detectionof a surplus of over Rs 1,700 crore lying in the interestsuspense account.

The Finance Ministry, however, declined to notify 9.5 percent rate of return on PF deposits in 2010-11, on the groundthat EPFO will not be able to manage and sustain such anincrease in interest rate.

EPFO, with a subscriber base of 4.71 crore, has beenmaintaining interest rate of 8.5 per cent on PF deposits since2005-05.