Unions to raise PF rate issue at March 31 meet

The Employees Provident Fund interest rate hike notification is set to dominate central trade unions' meeting with Labour Minister K Chandrashekar Rao on March 31.

Though the meeting had been set up to discuss problems in labour laws, sources in the All-India Trade Union Congress (Aituc) said the union would use the meeting to lobby for the issuance of notification.

Though the labour ministry is the nodal ministry for notifying the hike, it is waiting for a go- ahead from the finance ministry, which will have to make a provision for meeting a deficit of Rs 927 crore in the EPFO accounts, created by the decision to raise the interest rate from 9 per cent to 9.5 per cent.

The deadline for the annual notification of the EPFO interest rate is March 31. Aituc sources said no notification on the interest rate was issued in the last three years. The EPFO was settling accounts of around 125,000 people a month, who close their accounts because of retirement and other reasons, at an ad hoc rate of 8.5 per cent.

The trade unions have met Prime Minister Manmohan Singh several times since the announcement of the hike on February 2.

During the last meeting, four days back, a CPI delegation had requested the Prime Minister to issue the notification as soon as possible.

According to sources, the Prime Minister expressed surprise to Gurudas Dasgupta and Sudhakar Reddy (both CPI) that the notification had not been issued yet.

However, no assurances were given about when the notification would be issued.

Under pressure from the Left parties, the government had agreed to raise the interest rate on the day the Cabinet cleared the hike in the foreign direct investment limit in the telecom sector from 49 per cent to 74 per cent.

Since then the issue has been raised several times in Parliament. But there has been no meeting between Finance Minister P Chidambaram and the trade unions for setting the matter.

Dasgupta said recently he would not go knocking at the finance minister's doors for the notification to be issued. He said the finance minister should invite the trade unions for a meeting. The finance ministry's response is awaited.