Labour and Employment Minister Oscar Fernandes will take up the issue of revising interest rates on the special deposit scheme where bulk of the Employee Provident Fund remains invested with Prime Minister Manmohan Singh and Finance Minister P Chidambaram. Almost three-fourth of the Rs 1,54,000 crore corpus of Employees’ Provident Fund Organisation is invested in the SDS on which the government pays 8 per cent. The lower rate binds the EPFO’s hands in offering its subscribers a higher interest rate. For 2007-08, EPFO has fixed the interest rate for subscribers at 8.25 per cent.Fernandes told The Indian Express that in recent times, with the Reserve Bank of India hiking the interest rates, even banks offer higher rates on deposits. Therefore, we would request the PM to consider higher rate of interest on SDS,” added Fernandes.However, the minister refused to specify the quantum of hike he would seek. Even if the interest rate on SDS is hiked by 50 basis points, it will make a substantial difference to the fund’s total earnings. The quantum of EPFO funds to be invested in SDS window was closed some years back.
