The labour ministry will soon notify 8.65 per cent rate of interest on Employees' Provident Fund (EPF) for 2018-19 as the finance ministry does not disagree on this rate, said Labour Minister Santosh Gangwar on Friday.
A notification by the labour ministry is required regarding the interest rate for crediting the interest amount into accounts of over 6 crore subscribers.
Besides, it would enable retirement fund body Employees' Provident Fund Organisation (EPFO) to settle on withdrawal claims on this rate. Now, the EPFO is paying an interest rate of 8.55 per cent for 2018-19 under PF withdrawal claims. The 8.55 per cent interest rate on PF deposits was fixed for 2017-18.
"The finance ministry does not disagree with 8.65 per cent interest on 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 here.
Meanwhile, FICCI Committee on Private Security Industry chair Rituraj Sinha said that amid the current slowdown, private security continues to grow and create jobs. "Assurance from senior ministers to resolve issues related with GST, Code on Wages, Credit Access for smaller companies and enabling rather than enforcing compliance to labour reforms is reassuring."
In February, the EPFO's apex decision-making body Central Board of Trustees, headed by the labour minister, had decided to raise the interest rate on EPF to 8.65 per cent for 2018-19, which was the first increase in the past three years.
In April, the Department of Financial Services (DFS), a wing of the finance ministry, had given its concurrence to the EPFO's decision to provide 8.65 per cent rate of interest for 2018-19.
The rate was raised to 8.65 per cent for the previous financial year from 8.55 per cent provided in 2017-18. The EPFO had earlier reduced the interest rate for 2016-17 to 8.65 per cent as compared with 8.8 per cent 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 estimates, there would be a surplus of Rs 151.67 crore after providing 8.65 per cent rate of interest for 2018-19 on EPF. There would have been a deficit of Rs 158 crore on providing 8.7 per cent rate of interest on EPF for the previous financial year. That is why the body decided to provide 8.65 per cent rate of interest for 2018-19.
The EPFO had provided a five-year-low interest rate of 8.55 per cent to its subscribers for 2017-18.