Labour ministry keen to retain 8.65% interest rate on EPF deposits for 2019-20
New Delhi: The labour ministry is keen to retain an interest rate of 8.65 per cent paid on provident fund deposits to around six crore subscribers of retirement fund body EPFO for the current financial year, a source said. The apex decision making body of Employees' Provident Fund Organisation (EPFO) -- Central Board of Trustees -- is likely to consider the rate of interest on EPF (Employees' Provident Fund) deposits in its meeting scheduled on March 5, 2020.
"The proposal to provide interest rate on EPF deposits for 2019-20 may come up for consideration and approval in the Central Board of Trustees (CBT) meeting on March 5," a source said. The source further said that the ministry is keen to retain the interest rate at 8.65 per cent, as was provided in financial year 2018-19.
Speculations are rife that the interest rate on EPF may be lowered to 8.5 per cent for the current fiscal, a tad lower than 8.65 per cent provided for 2018-19.
According to the source, the agenda for the CBT meeting has not yet been finalised and it is difficult to predict EPFO's income projections for the current fiscal, which will be the basis for fixing the interest rate.
The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes.
The labour ministry requires the finance ministry's concurrence to provide a rate of interest on EPF deposits in a fiscal year. Since the Government of India is the guarantor, finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal.
The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.