Employees' Provident Fund Organisation or EPFO is likely to soon credit interest into accounts of its 6 crore subscribers for 2018-19. Labour Minister Santosh Gangwar today said that over 6 crore EPFO members will get 8.65% interest for 2018-19, according to Press Trust of India. Last month, the labour minister had said that the labour ministry will soon notify 8.65% rate of interest on Employees' Provident Fund (EPF) for 2018-19 as the finance ministry does not disagree on this rate.
Earlier this year, the EPFO's (Employees' Provident Fund Organisation) 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% for the year 2018-19, the first increase in the past three years.
"The finance ministry does not disagree with 8.65% interest on EPF for 2018-19. I believe that it will soon be notified," Gangwar had said on the sidelines of a FICCI meet last month.
A notification by the labour ministry is required for EPFO to credit the interest amount into accounts of over 6 crore subscribers. It would enable retirement fund body Employees' Provident Fund Organisation (EPFO) to settle on withdrawal claims on this rate.
Currently, the EPFO is paying an interest rate of 8.55% for 2018-19 under EPF withdrawal claims. The 8.55% interest rate on EPF deposits was fixed for 2017-18.
After the finance ministry's concurrence, the labour ministry can notify the rate of interest for 2018-19. Thereafter, the EPFO gives directions to its over 136 field offices to credit the rate of interest into subscribers' account and settle their claims accordingly.
For 2018-19, EPFO had raised interest rate to 8.65%, from 8.55% 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% for 2015-16.
According to the EPFO's estimates, there would be a surplus of ₹151.67 crore after providing 8.65% rate of interest for 2018-19 on EPF. There would have been a deficit of ₹158 crore on providing 8.7% rate of interest on EPF for the previous financial year. That is why the body decided to provide 8.65% rate of interest for 2018-19. (With Agency Inputs)