New Delhi, March 10 (IANS) A decision on the interest rate for the Employees' Provident Fund (EPF) was deferred yet again Saturday as the government said it needed more time to fix the rate for the current fiscal year.
The central board of trustees of the Employees' Provident Fund (EPF), which met under the chairmanship of Labour Minister Oscar Fernandes, could not arrive at a consensus after trade union representatives on the board opposed the government move to reduce the rate, board sources said.
They said the trade unions participating in the meeting rejected a suggestion for fixing the interest rate for 2006-07 at 8 percent and for 2007-08 at 8.25 percent.
For 2005-06, the organisation paid interest at the rate of 8.5 percent on the obligatory savings of 40 million subscribers who are employed in the organised sector.
Facing financial crunch, it reportedly wanted to reduce the rate by 0.5 percentage point, as this year's investment income allows it to pay interest at a rate of only eight percent.
The organisation has said that it has been left with only Rs.102.5 million as surplus and it would not be able to pay the existing interest rate for the employees as that would result in a deficit of Rs.3.65 billion.
On the other hand, the trade unions and the Left parties have demanded the rate to be raised to 9.5 percent.
The Left-backed trade unions have also opposed the finance ministry's proposal to allow five percent of the EPF money to be invested in the stock market in order to increase its income.
The board had failed to arrive at a consensus on the interest rate for the current fiscal during its two previous meetings in December and in January too.