EPFO subscribers likely to get 9.5% interest in 2010-11:Kharge

Posted By: Pti
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New Delhi, Feb 15 (PTI) About 4.71 crore EPFO subscribersare likely to get one per cent increase in interest to 9.5 percent on their deposits for 2010-11 with Labour MinisterMallikarjun Kharge today expressing hope the Finance Ministrywill shortly give its concurrence to the proposal.

"I hope that after we answered all clarifications,they (Finance Ministry) will approve it (9.5 per cent interestrate for 2010-11)," he said.

Kharge was speaking to reporters after a meeting ofthe Central Board of Trustees (CBT), the apex policy makingbody of the Employees'' Provident Fund Organisation (EPFO).

"As far as 9.5 per cent interest (2010-11) is concerned,the Finance Ministry had sought some clarifications. Thoseclarifications have been sent by Labour Secretary to theFinance Ministry," he added.

Downplaying the ongoing tussle between the two ministriesover hiking the interest rates on PF deposits, Kharge said,there was "no tussle between the two ministries over giving9.5 per cent interest rate."

"These are just consultations between the two ministries.

They had certain queries and when we satisfy them. They willdefinitely approve it," Labour Secretary P C Chaturvedilater explained.

Although CBT, which is headed by labour minister, haddecided to give a higher return of 9.5 per cent on providentfund deposits for 2010-11, the Finance Ministry had expressedits opposition to the move.

Following discovery of Rs 1,731.57 crore in suspenseaccount, the EPFO trustees favoured raising the rate ofinterest on provident fund deposits to 9.5 per cent for its4.71 crore subscribers from 8.5 per cent which is being paidby EPFO since 2005-06.

The decision, however, did not find favour with theFinance Ministry which argued that there was no real surplus.

It said the surplus shown by the EPFO arose because allsubscribers'' accounts were not updated.

In a recent letter of January 29, the Labour Ministryargued the EPFO is not asking for any government support forthe extra returns to the salaried workers. It is their moneywhich has earned returns.

The Finance Ministry''s objections were based on a reportby Comptroller and Auditor General which suggested that therewas no surplus with the EFFO''s interest suspense account.

The Finance Ministry has to give concurrence to the rateof return decided by CBT and notify allowing tax exemption onthe entire such earnings on PF deposits.

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