Trade unions are up in arms against the reported refusal of the finance ministry to approve and notify an interest rate of 9.5 per cent on provident fund (PF) deposits for 2010-11, as decided by the Employees Provident Fund Organisation (EPFO) trustees in September.
“We won’t let it happen. This is anti-labour. This is workers’ money and the trustees of the money decided it in accordance with the law “, said A D Nagpal, secretary, Hind Mazoor Sabha, when asked about the finance ministry’s stand on paying better returns to EPFO’s over 4.71 crore subscribers.
Reportedly, Finance Secretary Ashok Chawla wrote to the labour ministry, opposing an interest rate of 9.5 per cent on PF deposits. When contacted, labour ministry sources said they would soon be sending a reply to the letter after consulting EPFO.
The Central Board of Trustees (CBT), the highest policy-making body of EPFO, headed by Labour Minister Mallikarjun Kharge, had raised the interest rate on PF deposits for 2010-11 to 9.5 per rate from 8.5 per cent in September, after it found a surplus of over Rs 1,700 crore.
EPFO had been paying an interest rate of 8.5 per cent since 2005-06. Nagpal, also a CBT member, said, “The finance ministry has to see there was no overdrawal from the interest suspense account. This money belongs to workers and has to be given to them”.
The finance ministry, he further said, “should not drag its feet as it is workers’ money”.
Expressing similar views, secretary of the All India Trade Union Congress, D L Sachdev said, “Their (finance ministry’s) stand is unreasonable. This is surplus money, detected after the verification of the interest suspense account over several years”. “The money belongs to workers. CBT, in its wisdom, decided to give it to workers by raising the rate of return from 8.5 to 9.5 per cent “, he added.
He further said, “through this decision, the finance ministry is trying to pressurise the Ministry of Labour and Employment and CBT into agreeing for investing a portion of EPFO’s large corpus of Rs 3 lakh crore in stock market.”
CBT had several times in the past rejected the finance ministry’s proposal of parking EPFO funds in stock markets. The finance ministry, under its new investment pattern issued in August 2008, had asked EPFO to invest up to 15 per cent of its funds in equities.