PF rate to remain unchanged
After a lengthy discussion by the various Union Ministries involved in the process, the Union Government has decided to notify an 8.65% interest rate for the PF deposits in India. This offered rate of interest is the same as the one offered last year.
What has happened?
- The Labour Ministry and the Finance Ministry had a few issues related to the EPFO rates in India.?
- While the finance ministry was in favor of reducing the rates to ensure fiscal compliance, the labor ministry was too keen on the deduction.
- However, after the labor ministry was able to prove before the finance ministry that the EPFO organization will be left a sufficient surplus of funds even after paying 8.65% interest to the EPFO subscribers.?
- This has prompted the finance ministry to drop its objection and continue with the current PF rate.
- These issues were discussed in a closed-door meeting of the Central Board of Trustees (CBT).
What about the CBT?
- The CBT is the apex body which is responsible for fixing the PF rate being offered to the subscribers of the PF plan of EPFO.
- It is chaired by the labor minister and various central and state government officials, trade unions and industry bodies are also part of the CBT.
- The EPF interest rate determined by the CBT is notified by the labor ministry after obtaining the consensus of the finance ministry.