7th Pay Commission: Good news and what the hike in GPF rate means to CG employees

New Delhi, Oct 18: Central Government employees who have been awaiting for good news relating the 7th Pay Commission may have some reason to cheer.

While there is no news relating to a pay hike there is some development that could bring about a cheer. The rate of the General Provident Fund has been increased.

The Union Government increased the rate of interest for the General Provident Fund (GPF) and other related schemes by 0.4 percentage points to 0.8 per cent for the October-December quarter.

The GPF rate has now been brought in line with that for the Public Provident Fund (PPF). It may be recalled that even the PPF rate had also been hiked recently by the Union Government.

The interest rate on GPF was 7.6 per cent for the July-September quarter of 2018-2019. During the year 2018-19, accumulations at the credit of subscribers to the GPF and other similar funds shall carry interest at the rate of 8 per cent with effect from October 1 2018 to December 31 2018.

The interest rate would apply on Provident funds of Central Government employees, defence forces and also those employed with the railways. Last month, the government had announced that the interest on small savings including NSC and PPF will be hiked by up to 0.4 per cent points for the October-December quarter in a bid to align it with rising deposit rates in the banks.

The GPF is available only for government employees. The employee becomes a member of the fund by contributing a certain percentage of the salary to the account. On the other hand the PPF is available for all citizens including minors.

This could bring about some cheer for CG employees who are hoping that the government would undo the injustice caused to them by the 7th Pay Commission.