People's Democracy

‘Restore Interest Rate

for EPF to 9.5 Per Cent’

Former MP and CITU secretary, Dipankar Mukherjee, wrote the following letter to minister of labour and chairman of CBT (EPF), Mallikarjun Kharge, on March 23, 2012 seeking urgent intervention to restore the rate of interest for EPF to 9.5 per cent that had been slashed to 8.25 per cent by the finance ministry. A copy of the letter has also been sent to Central Provident Fund Commissioner, R C Mishra.

IT is really shocking that while the rate of interest for General Provident Fund (GPF) has been rightly hiked from 8 per cent to 8.6 per cent vide a notification by the Ministry of Finance dated March 19, 2012, the rate of interest to Employees’ Provident Fund (EPF) members had been unilaterally slashed by the same ministry a few days back from 9.5 per cent to 8.25 per cent, ignoring the demand of the employees’ representatives in the Central Board of Trustees EPF meeting held on 22.12.2011 to maintain the interest rate at 9.5 per cent. As you may be kindly aware, this is an unprecedented decision whereby EPF rate has been pegged at a lower level than GPF. I am afraid this will be quite embarrassing to CBT, headed by you, coupled with strong resentment of 5 crore workforce covered by EPF.

The decision of finance ministry to reduce the EPF rate of interest becomes more irrational and unacceptable as a similar hike in interest rate from 8 per cent to 8.6 per cent has also been effected in Special Deposit Scheme (SDS) where a large proportion of EPF corpus is invested. As a matter of fact in the CBT meeting on 23.12.2011, employees’ representatives had urged the government to increase SDS rate of interest to facilitate declaration of higher rate of interest for EPF.

In view of the above, I urge upon you to immediately take up the issue with finance ministry on behalf of CBT so that the unjustified decision of reduction in EPF rate of interest is reviewed and interest rate of 9.5 per cent is restored, in order to avoid industrial unrest caused by the unilateral decision of the finance ministry. This may please be treated as ‘MOST URGENT’.