Subscribers to the employees' provident fund will get interest at an increased rate of 8.6 per cent for the current fiscal, a move that would benefit around 50 million.
"The rates were brought down due to lower income (on investment in Special Deposit Schemes). There is no question of minimum or maximum interest rates. We distribute it as per our revenue. Next time, it will be 8.6 per cent," labour minister Mallikarjun Kharge said in the Rajya Sabha.
The Employees' Provident Fund Organization (EPFO) had brought down the rate of interest to 8.25 per cent for 2011-12 from 9.5 per cent in 2010-11. The pension fund body has parked funds in excess of Rs55,000 crore in the Special Deposit Schemes ( SDS) aimed at providing better returns to non-government provident funds and other such funds.
Kharge said the rate of interest on funds depend on the revenues.
"Even if the interest rate is less, the money is kept in safe custody," Kharge added.
He said the rate of interest on the EPF is determined by the central government in consultation with the Central Board of Trustees, Employees Provident Fund.
The government declared 8.25 per cent rate of interest on EPF accumulation for the year 2011-12 based on the earnings of the fund during the year.
The minister said, however, requests from various central trade unions have been received to maintain the existing rate of interest.