April 11, 2002

SPECIAL MEETING OF CENTRAL BOARD OF TRUSTEES (EPF) ON FRIDAY TO DETERMINE INTEREST RATE

    A special meeting of the Central Board of Trustees of the Employees Provident Fund would be held tomorrow (April 12, 2002) to recommend the rate of interest to be credited to the members’ account for the current financial year (2000-03). The decision to hold a special meeting has been taken by the Labour Minister Shri Sharad Yadav in his capacity as a Chairman of the Central board of Trustees.

    The Committee on Subordinate Legislation, Rajya Sabha in its 134th Report has recommended that whenever there is a difference of opinion on the question of rate of interest between the CBT and the Central Government, the final view of the Central Government must come before the CBT to apprise it of the factors responsible for the Central Government’s decision.

    The Board during its last meeting on January 22, 2002 had recommended as an interim measure to continue 9.5% as the rate of interest to Employment Provident Fund subscribers for 2002-03 which was conveyed to the Central government. It was also decided that the Board would meet again in March to review the overall situation regarding interest earnings by the Fund in view of the fact that exact financial position regarding interest earnings would be known only after the presentation of general budget for the financial year 2002-2003. Meanwhile, the Finance Ministry has reduced the rate of interest on GPF, PPF etc. by 50 basis points as per the last budget speech of the Finance Minister to 9 %.

    Nearly 80 % of the EPF corpus amounting to about Rs.48,000 crore stands invested in the Special Deposit Scheme of the Government of India. The Central government has reduced the rate of interest on SDS to 9 % from April 1, 2002. The interest rate on SDS is the major factor influencing declaration of rate of interest on the EPF.

    It is expected that interest earnings on the Employees Provident Fund during 2002-03 would be Rs. 5745.83 crore while the liability towards payment of interest to EPF members @ 9% during the current financial year would be Rs. 5,334.34 crore leaving a small surplus of Rs. 411.9 crore.