EPF rate may rise if there’s surplus

The government today had to face sharp criticism from the Left parties for its decision to cut EPF rates from 9.5 per cent to 8.5 per cent, ...

The government today had to face sharp criticism from the Left parties for its decision to cut EPF rates from 9.5 per cent to 8.5 per cent, following which Labour Minister Sis Ram Ola today assured Lok Sabha that he would not hesitate in raising the interest rate if there was surplus fund by the end of the financial year.

The minister’s remarks came at the end of a brief debate on a calling attention notice by CPI leader Gurudas Dasgupta during which the Left parties lashed out at the government for taking the ‘‘unilateral’’ decision harming the interest of lakhs of workers for whom this was the only social security. Dasgupta accused the minister of imposing his decision on the board of directors of the EPFO at the last meeting and that the decision was not unanimous.

Accusing the earlier NDA government of reducing the EPF rate from 12 per cent to nine per cent, he said ‘‘the legacy of the NDA government is being followed by the present government.’’

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Dasgupta also said that the EPFO had Rs 8,000 crore lying in a ‘‘suspense interest account’’ which had not been accounted for and that dubious accounting practices were being followed which depressed the interest rates due to workers.

He said that ‘‘assets were being understated and liabilities were being overstated’’ by the EPFO and workers’ interests were being short-changed by the government. He demanded that the Finance Minister make a statement in the House on why higher interest rates could not be paid on 30-year long term loan given by the workers to the government.

Seeking to put the ball in the Finance Ministry’s court, Ola said ‘‘who am I to increase or decrease the interest rate. This is the job of the finance ministry which has pegged it at eight per cent.’’

The labour minister said the interim 8.5 per cent interest rate would leave a deficit of Rs 206 crore. He said the provident fund commissioner has been asked to take urgent steps to recover PF dues so that the deficit can be bridged.

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Asserting the government was determined to protect the interest of workers, ola said he had written to the Finance minister to consider raising the interest on special deposit scheme. He said the 9.5 EPF interest rate for 2002-03 was on ‘‘ad hoc’’ basis which has still not been ratified by the finance ministry.

Similary, the nine per cent interest plus 0.5 per cent bonus for 2003-04 was also on an ad hoc basis. ‘‘This is not final, because till today the Finance ministry has not ratified it.’’ Dasgupta earlier accused the government of being ‘‘soft’’ towards stockbrokers and ‘‘hard’’ towards workers.

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