Govt okays 9.5% EPF rate for 2002-04

For 2002-03, the EPF board declared 9.5 per cent. For 2003-04, it was 9 per cent along with a 0.5 per cent bonus since it was a golden jubilee year. These rates were ratified only today.

Chidambaram said that the decision may involve a net outgo of about Rs 66 crore. While the fund earned a surplus of Rs 204.92 crore during 2002-03, there was a shortfall of Rs 271 crore in the following fiscal.

Ahead of Assembly elections in Bihar, Jharkhand and Haryana, Chidambaram, after meeting Prime Minister Manmohan Singh, had announced that the Government would offer 9.5 per cent interest in 2004-05 as well.

The central board of trustees of EPFO, headed by Labour Minister K Chandrasekhar Rao, had estimated a Rs 927 crore gap between what it earns on investments and the higher 9.5 per cent interest to be paid to subscribers during 2004-05.

The EPFO board is expected to meet in May to formulate its recommendations and discuss ways of bridging the deficit and arrive at the interest rate for 2005-06.

Chidambaram also announced his Ministry’s decision to cut red tape and introduce E-governance by reducing paperwork drastically from May 1.

He said the total number of periodic reports that had to be made by assessees to indirect tax authorities had been drastically reduced from 133 to a mere seven.

This follows the recommendation of a working group that went into the streamlining of management information system reports and returns, many of which were found to be ‘‘redundant and repetitive’’.