EPF rate decision deferred till July 20

Tuesday impasse was because trade unions refused to step down from demands for a 12 per cent rate of return, while the govt argued for a 4 per cent cut – to eight per cent – which is all it says it can afford without bleeding the fund corpus. A 9.5 per cent interest rate was announced for EPF funds last year, but it is yet to be notified.

At the end of today’s meeting, Minister for Labour Sis Ram Ola said a decision was deferred because ‘‘All members did not get a chance to speak.’’ It was clear both parties were unwilling to step down, and hence no decision could be taken. Ola maintained that a decision on the interest rate would only be taken ‘‘With the consensus of all parties,’’ but such a consensus may be too optimistic a target.

Today, the trade unions represented in the CBT reiterated that they would stick to their demand for a 12 per cent interest rate. ‘‘We have rejected the centre’s proposal outright and conveyed it to labour minister,’’ said CITU leader Tapan Sen in a press release.

Trade unions have urged the Labour Minister to lead a delegation to the Prime Minister to resolve the issue. They say the root of the problem lies in the government’s decision to maintain an eight per cent rate of interest on Special Deposit Scheme (SDS). ‘‘The interest rate of SDS required upward revision for our demands to be met,’’ they said.

Eighty per cent of EPF money is parked in SDS, and the FM has made it clear in his that the returns from this fund would not be altered.