The labour ministry will soon notify 8.65% rate of interest on the Employees' Provident Fund (EPF) for 2018-19, labour minister Santosh Gangwar said on Friday. A notification by the labour ministry is required for crediting the interest amount into accounts of over 6 crore EPFO subscribers.
Besides, it would enable retirement fund body Employees' Provident Fund Organisation (EPFO) to settle on withdrawal claims on this rate. The EPFO is currently paying an interest rate of 8.55% for 2018-19 under PF withdrawal claims. The 8.55% interest rate on PF deposits was fixed for 2017-18.
"The finance ministry does not disagree with 8.65% interest on the EPF for 2018-19. I believe that it will soon be notified," Gangwar told reporters on the sidelines of a conference on private security guards at Ficci.
In February, the EPFO's apex decision-making body, the Central Board of Trustees, headed by the labour minister, had decided to raise the interest rate on the EPF to 8.65% for 2018-19, the first increase in the last three years.
In April, the Department of Financial Services (DFS) had given its concurrence to the EPFO's decision to provide 8.65% interest rate for 2018-19.
The rate was raised to 8.65% for the previous fiscal year, from 8.55% in 2017-18. The EPFO had earlier reduced the interest rate for 2016-17 to 8.65%, compared with 8.8% for 2015-16.
After the finance ministry's concurrence, the income tax department and the labour ministry are required to notify the rate of interest for 2018-19. Thereafter, the EPFO would give directions to its over 136 field offices to credit the rate of interest into subscribers' account and settle their claims accordingly.
According to the EPFO's estimates, there would be a surplus of ?151.67 crore after providing a 8.65% interest rate for 2018-19 on the EPF. There would have been a deficit of ?158 crore on providing the 8.7% rate of interest on the EPF for the previous fiscal year. That is why the body decided to provide 8.65% interest rate for 2018-19.
The EPFO had provided a five-year-low interest rate of 8.55% to its subscribers for 2017-18.
Also read: Average monthly job creation at a 4 month high: EPFO data