TUs to press for 9.5% EPF rate

NEW DELHI: Even as the Employees Provident Fund Board decided to retain the 8.5% interest rate, Left-backed trade unions said they would step up pressure on the government to raise it to 9.5%.

The Leftists, who have been making this demand ever since the government lowered the interest rate, are planning to approach various forums on the issue and make it part of their proposed agitation against the economic policies of the central government. “

We are demanding that the interest rate be increased to 9.5%. The banks are giving 9.5% for one year deposit,” CPM politburo member and Citu leader MK Pandhe said. CPI MP and Aituc’s Gurudas Dasgupta also opposed the decision and said the trade unions would hit the streets to demand an hike in the interest rate. The sponsoring committee of trade unions is meeting on August 4 to chalk out their next course of action.

The Central Board of Trustees (CBT) of EPF expressed its disappointment over the decision to continue with the 8.5% interest rate for nearly four crore subscribers for the fiscal 2006-07. It said despite repeated adjournments of their meetings, the government has not acceded to the unanimous recommendation of the CBT for opening Special Deposits Accounts for further investments and raising the administered rate of interest payable on the Self Deposits Scheme. The board said any interest rate below 9.5% cannot be accepted, particularly in the present high interest rate regime prevailing in the financial sector.

In fact, labour minister Oscar Fernandes said the government had decided to pay 8.5% interest rate on provident fund amid protests by some trade union representatives. This will put a burden of Rs 450 crore on the EPF fund. On the demand of the trade unions, Mr Fernandes said the board fixed the interest rate only for the previous year. and the decision on the current fiscal would be decided later.