The Employees Provident Fund Organisation on Monday decided on an interim interest rate of 8.5% for the current financial year for over 30 million subscribers.
Announcing the decisions taken at the Central Board of Trustees, its chairman and Union Labour Minister Sis Ram Ola said the there was a broad consensus on the rate, which would come down from 9.5 per cent to 8.5 per cent.
The rate of interest till now was 9.5 per cent and included 0.5 per cent bonus announced for 2003-04.
The Left-affiliated trade unions -- CITU and AITUC -- however, opposed the decision and threatened nation-wide protests. These willbe backed by Left parties and Sangh Parivar and will demand 12 per cent return for EPF subscribers.
to take to streets against the curtailing of interest rates.
Bhartiya Mazdoor Sangh president Harsubhai Dave, emerging from the meeting, said: "We will demosntrate against this in Delhi and Kolkata on September 20."
W R Varadarajan of CITU said: "We will observe a Demand Day on September 20 all over India to protest reduction in the rate."
However, Ola said that this is an interim EPF rate and the final rate will be arrived at by the end the year after consultations with the Union finance ministry.
Briefing reporters after the meeting, Ola said the interim interest of 8.5 per cent would leave a deficit of Rs 206 crore which, he said, could be bridged by launching a special drive to mop up funds through outstanding arrears.
"At the time of the final review at the end of the fiscal year 2004-05 the interest rate would be fixed depending on the available funds," he said and assured the subscribers that "it will not be lower than 8.5 per cent. If we earn more, the interest can go up."
Ola said the labour ministry would recommend to the finance ministry that it should ratify the interest rate of 9.5 per cent for 2002-03.
He said the CBT also decided to recommend 9 per cent interest rate along with a 0.5 per cent interest for 2003-04 and added that the finance ministry would be requested to ratify the same so as to enable the labour ministry to notify the interest.
The finance ministry would also be requested to let EPFO redeposit the interest earned on Special Deposit Scheme in SDS itself, Ola said.
He also said that in view of rising inflation, the finance ministry should consider raising the interest rate on SDS.