Employees' Provident Fund Organisation (EPFO) may withdraw Rs 53,000 crore invested in the Special Deposit Scheme (SDS), if the Finance Ministry does not agree to upward revision of interest rate under the scheme.
"We may take back our entire corpus invested in SDS, if finance ministry does not agree to upward revision of interest rate under the scheme," Labour Minister Oscar Fernandes said today.
He said, "We have apprised about the current market scenario to Finance Minister in a recent meeting. We expect an upward revision of interest rate on SDS to 8.8 to 9.0 per cent from prevailing rate of 8 per cent."
"Finance Minister approved the idea of withdrawing money from SDS and investing in any other government securities or instrument where EPFO can get better return. We would give reasonable time to Finance Ministry to take a call on it before taking a decision," he added.
During the last week, Fernandes had met Finance Minister with a delegation of member of Central Board of Trustees (CBT) for upward revision of interest rate on SDS, CBT member A D Nagpal told PTI.
Nagpal said that FinMin had clearly told the Labour Minister that in case he finds better return yielding avenues, he should go for that and withdraw EPFO money from SDS.
Adding further he said, "But the Finance Minister did not close the talks as he had asked for details of the returns on other investments of EPFO where it was getting more than 8 per cent."
The government is yet to decide the interest rate on SDS for 2007-08. For the financial year 2006-07, it was 8 per cent. The decision of CBT about PF deposit interest rate for 2008-09 is almost contingent upon goverment's announcement of interest rate on SDS as bulk of EPFO is invested in this scheme only.
