labels: economy - general
Government approves 8.5 per cent interest rate for EPF depositsnews
20 October 2007
Mumbai: The central government has notified payment of 8.50 per cent interest on employees provident fund deposits for the year 2006-07, which would benefit over four crore EPF subscribers.

"The central government has notified the rate of interest for the year 2006-07 at 8.5 per cent," central provident fund commissioner A Viswanathan said.

The Central Board of Trustees of EPF had, in July, recommended the 8.5 per cent rate, despite opposition from trade unions that were seeking higher returns at a time when even bank fixed deposits were paying attractive interest rate.

The EPF board of trustees had in July, agreed to continue paying 8.5 per cent interest rate to the subscribers for fiscal 2006-07, amid pressure from the Left-backed trade unions.

The decision to maintain the 8.5 per cent interest rate will put a burden of Rs450 crore on the EPF. However, according to sources, the deficit could be offset from a surplus of Rs590 crore lying in the interest suspense account, contingency reserve and special reserve fund.

The total interest outgo for 2006-07 will be to the tune of Rs7,800 crore. Even after paying 8.5 per cent interest EPF would have a surplus of Rs83 crore.

The EPF has a corpus of Rs94,000 crore including pension fund.



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Government approves 8.5 per cent interest rate for EPF deposits