No move on PF interest, board says no to equity

The central board of trustees of the Employees Provident Fund (EPF) today postponed a decision on the contentious issue of interest rate for the current fiscal for its four crore subscribers.

The board, chaired by Labour Minister Oscar Fernandes, also rejected the finance ministry's proposal to invest 5% of the EPF money in the equity market.

Fernandes said the next meeting of the trustees would be held by the end of February.

Fernandes added that he would try to have another round of talks with the Finance Minister over the issue of seeking subsidy to meet the requirement for additional funds before the next board meeting.

"The rate of interest will depend on how much money we have in our coffers," he added.

The government had cut the rate to 8.5% for 2005-06 from 9.5% in 2004-05 as investment in government-run Special Deposit Scheme (SDS), which gave only 8% interest, did not suffice.

D L Sachdeva, secretary of AITUC, affiliated to CPI, told reporters that the central trade unions demanded that a meeting should be organised with Prime Minister Manmohan Singh on the crucial issue.

At the present rate of 8.5%, EPFO will have a Rs 450 crore deficit, and a reduction by half a per cent will leave it with a marginal surplus of Rs 10.25 crore.