The Employees’ Provident Fund Organisation will not be able to pay more than 8.5 per cent interest on PF deposits during 2009-10 as it has no reserves left following a Rs 139 crore (Rs 1.39 billion) deficit incurred last fiscal. “There are no reserves which could be used as alternative option for additional funds for giving higher rate of interest than 8.5 per cent this fiscal”, said an agenda note for next month’s meeting of the Central Board of Trustees to be chaired by Labour Minister M Mallikarjun Kharge.The CBT, the highest policy-making body of the EPFO, is meeting on July 4, to discuss and recommend the interest rate on PF deposits for the current fiscal.
In the agenda listed for the CBT (advisory body) meeting, the EPFO’s finance Committee recommended that “8.5 per cent interest rate on PF deposits for this fiscal is feasible and leaves a surplus of Rs 6.4 crore (Rs 64 million).”
Once the CBT, which is headed by the Minister, recommends the interest rate on PF deposits, it is sent to the Finance Ministry for final approval.
During the last fiscal, EPFO had to suffer a deficit of around Rs 139 crore to maintain interest rate of 8.5 per cent. This deficit was later made up from the available Contingency Fund of around Rs 150 crore (Rs 1.5 billion).