Finance minister Jaswant Singh has advised the labour ministry to scale down the interest rate on the Employees Provident Fund to 9 per cent from the existing 9.5 per cent.
Speaking in the Rajya Sabha today Singh also said he planned to improve the tax regime to reverse the falling savings rate. He said the government was also considering a possible relocation of the Foreign Investment Promotion Board out of the department of industrial policy and promotion.
On EPF deposit rates the minister said the advice was based on considerations of prudent asset liability management, absence of a risk capital reserve with the EPF and the recommendation of the YV Reddy Committee to benchmark all interest rates to the average secondary market yield on government securities.
In his oral reply on tax issues the minister said he was concerned about the huge diversion of savings into gold, which made India the largest importer of the yellow metal in the world. He said there was a need to instead encourage savings in productive avenues to match the 32 per cent investment required for an 8 per cent rate of growth of gross domestic product annually. He said