New Delhi: The central board of trustees of the cash-strapped Employees Provident Fund Organisation (EPFO) is meeting in New Delhi amid speculation of a 0.5 per cent cut in interest rate to be paid to its EPF subscribers in the current financial year.

The current rate of interest paid to the over 40 million EPF subscribers is 8.5 per cent and if this rate has to be maintained, the EPFO would face a deficit of Rs450 crore.

If the current rate is scaled down by half a per cent, the EPFO would have a marginal surplus of Rs10.25 crore.

The board of trustees at its last meeting in December 2006, could not arrive at a consensus on interest rates for the year. Trade unions, particularly those affiliated with Left parties, have demanded a 9.5 per cent interest, though representatives of employers and state and central government officials are of the view that the rate should be in proportion to the returns on the investments of the fund.

Employees' representatives have opposed any further cut in the interest rate.