The Telegraph
Since 1st March, 1999
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Minister buys time on PF rate

New Delhi, March 28: Stalling again a move to slash the interest rate on employees’ provident fund, labour minister Sahib Singh Verma today appointed a sub-committee to look into the issue. The sub-committee is expected to give a report by the end of the next month.

The minister, however, did not rule out an eventual reduction while he stressed that he was personally against it.

“I will go with the recommendation of the sub-committee, whatever it be, but I am not in favour of reducing the interest rate by even 0.1 per cent,” Verma said after a meeting of Central Board of Trustees of Employees Provident Fund here this morning. He also announced an ‘amnesty’ scheme to mop up arrears of Rs 2,200 crore from defaulting employers.

“The scheme will have to be passed in Parliament. It gives certain benefits, including waiving of penalties on the employers, so that they can cough up the amount,” said Verma.

The employees’ provident fund interest rate now stands at 9.5 per cent. The finance ministry, which has been locked in a tug-of-war with the labour ministry, wants to bring the rate down to 8 per cent. Verma said the rate decided by the panel would come into effect with retrospective effect from April 1.

The representatives of the Citu and the Aituc, which have been dropped from the reconstituted board because they refused to allow Verma to choose their nominees, protested outside the venue of the meeting.

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