New
Delhi: The Employees Provident Fund Organisation may increase the the
interest rate on your statutory savings to 8.75% for the current
financial year, compared to 8.5% paid last year, helping over 8 crore
subscribers earn higher returns during a period of high inflation.
EPFO’s
central board is scheduled to meet on Monday to decide the interest
rate for 2013-14. EPFO fixes the rate based on the interest earned on
its investment, a majority of which is in government securities, and
it’s expenses. EPFO manages a corpus of over Rs 5 lakh crore and is a
basic source of retirement fund for lakhs of Indians. Although it was
initially looking at maintaining the interest rate at 8.5%, EPFO has
found some surplus funds, based on higher returns to increase the
payout. Employees unions are demanding at least a 9% return but
labour minister Oscar Fernandes said that the interest rate was based on
EPFO’s earnings. “We can’t cross-subsidize,” he said on Sunday evening.
EPFO is estimated to have an income of around Rs 21,000 crore
in the current financial year and increasing the payout to 9% will
result in an additional burden of around Rs 1,200 crore.
A
higher payout ahead of the elections will will help the government blunt
some of the criticism it has faced on the price rise front.
