EPF Rate Delay To Affect 2 Mn Subscribers

New Delhi: The failure of the Centre to settle on the interest rate for provident fund is likely to affect around two million subscribers. The Government on March 11, once again got cold feet on the issue and the meeting of the Central Board of Trustees (CBT) of the Employees'' Provident Fund Organisation (EPFO) decided not to take up the matter despite the fact that it was on the agenda. The CBT had changed the interest rate for provident fund last time in April 2006, 8.5% for 2005-06, as against the previous year''s 9.5%. The CITU said 1.5 lakh subscribers left every month. Central Provident Fund said this kind of stalemate on PF interest rates has had a precedent. Decision on interest rates could not be taken for the two years before 2006 too. Trade unions expressed worry over the government''s lackadaisical attitude in handling the issue. While the agenda clearly spelt out a discussion on interest rate of 8% for the fiscal 2006-2007, the EPFO gave a figure of 8.2% for the following year. The rate of interest till April 2006 was 8.5%. A decision has to be taken for the period after that. Naturally, the government will find it difficult to first reduce the interest rate from 8.5% to 8% for 2006-2007 and then increase it again to 8.2% for the following year.