New Delhi: Retirement fund body Employees Provident Fund Organisation (EPFO) on Monday reduced interest rate on provident fund deposits to 8.65% per cent for 2016-17 from the current 8.8% per cent.
The Finance Ministry had earlier this year decided to lower interest on EFF for 2015-16 to 8.7 per cent from the 8.8 per cent approved by the CBT headed the Labour Minister.
The government had to roll back the decision and provide 8.8 per cent rate of interest on EPF deposit for 2015-16 following protests by trade unions.
As per the EPFO income projections of Rs 39,084 crore for the current fiscal, providing 8.8 per cent rate of interest on EPF deposits will leave a deficit of Rs 383 crore. There would be a surplus of about Rs 69.34 crore if In September, the government reduced interest rates on small savings schemes marginally by 0.1 per cent for the October-December quarter of 2016-17, which resulted in lower returns on PPF, Kisan Vikas Patra, Sukanya Samriddhi Account, among others.
The Labour Ministry, however, wanted to retain 8.8 per cent for the current fiscal as well, PTI reported earlier quoting a source.
The total corpus in EDLI administration account as on March 31, 2016 is Rs 2,372.83 crore. The interest generated on such a corpus would be around Rs 17.5 crore annually.