Finmin approves 8.8 per cent rate for EPF

New Delhi: The government on Friday rolled back its decision to lower interest rate on employee provident fund deposits and agreed to fix it at 8.8 per cent — recommended by EPFO’s trustees — for 2015-16.

The roll back comes in the backdrop of a nationwide protest by 10 central trade unions, including RSS-backed Bharatiya Mazdoor Sangh (BMS). EPFO’s apex decision making body the Central Board of Trustees headed by labour minister Bandaru Dattatreya had recommended 8.8 per cent interest to be credited to EPF workers for 2015-16.

However, the finance ministry had lowered the interest rate by 10 basis points the 8.8 per cent rate was fixed after taking into account the income from inoperative accounts also. But the decision was changed after nationwide protests and a clarification from the labour ministry that the rate fixed taking into account higher earning in 2014-15. “I am happy that our finance minister has agreed for 8.8 per cent interest to be given for EPF workers for 2015-16. We will issue a notification of 8.8 per cent interest rate immediately,” said labour minister Bandaru Dattatreya.

This is the third instance within two months that the Centre has been forced to roll back its decision on retirement fund due to strong protest by the employees and unions at a time when  assembly elections are going on in crucial states including West Bengal. Earlier the government was forced to take back its controversial budget  proposal to tax withdrawals from EPF and put a ceiling on employers contribution.