Interest rate on employees' provident fund (EPF) will be increased to 8.6 per cent for the financial year 2012-13.
The move will benefit about five crore subscribers, labour minister Mallikarjun Kharge said in the Rajya Sabha on Thursday.
"The rates were brought down due to lower income (on investment in Special Deposit Schemes)... There is no question of minimum or maximum interest rates. We distribute it as per our revenue. Next time, it will be 8.6 per cent," the minister said while replying to a debate on the working of the labour ministry.
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The Employees' Provident Fund Organisation (EPFO) had brought down the rate of interest to 8.25 per cent for 2011-12 from 9.5 per cent provided in 2010-11.
The retirement fund body EPFO has parked in excess of Rs 55,000 crore in the Special Deposit Schemes (SDS) aimed at providing better returns to non-government provident funds and other such funds.
Kharge said the rate of interest on funds depend on the revenues.
Since the money belongs to workers, the government does not intend to reap any benefit out of the fund and returns every penny for the welfare of the subscribers.
The interest rate was lowered last fiscal on the finance ministry's recommendation that with the kind of returns, it was not possible to continue with the 9.5 per cent given in the year-ago period.
Courtesy: Mail Today