The move is expected to bring some happiness a week before Diwali. Labor Secretary Sunil Barthwal confirmed the development to ET. “The approval was received from the finance ministry today. It will be notified at the earliest,” he said.
NS labor Ministry Interest rate for the year to be reported first EPFO Starts crediting it to the beneficiary’s account.
The move is expected to leave the EPFO ​​with a surplus of Rs 300 crore as compared to the previous financial year when it had a surplus of Rs 1000 crore.
The Central Board of Trustees of EPFO, headed by the Labor Minister, had in March this year approved the same interest rate of 8.5% for 2020-21 as in the previous year. However, the labor ministry will have to compulsorily take approval from the finance ministry on the proposed rate. The process was expedited after top officials of the labor ministry had earlier this month met officials of the finance ministry to address their queries and expedite the process.
The finance ministry has questioned the high interest rate announced by the EPFO ​​year after year in the last few years, when the interest rate for other government schemes, including public provident funds or small savings schemes, was very low.
The EPFO ​​had estimated income of around Rs 70,300 crore in the last financial year, which included around Rs 4,000 crore from selling a part of its equity investments and Rs 65,000 crore from debt.
Based on this, its Central Board of Trustees, headed by the Labor Minister, had recommended an interest rate of 8.5% for FY2011. EPFO had retained the interest rate PF deposit The same for 2020-21 as for 2019-20, despite huge covid withdrawals from the retirement fund kitty since the scheme was announced last year.
EPFO has an active subscriber base of over 60 million and every year it invests 15% of its annual earnings in equities and the rest in debt instruments. However, lakhs of salaried class workers have lost jobs or are working on low wages since the Covid outbreak, prompting them to withdraw from their retirement fund kitty under the Covid withdrawal scheme.