The finance ministry has set the interest rate offered to employees provident fund (EPF) subscribers at 8.7% for 2015-16, lower than the 8.8% suggested by the labour ministry and the EPF Organisation (EPFO), a move which could set it on a collision course with labour unions.
In a written reply to the Lok Sabha, labour minister Bandaru Dattatreya said the Central Board of Trustees (CBT) of EPFO at its 211th meting on 16 February proposed an interim interest rate of 8.8%.
“The ministry of finance has, however, ratified an interest rate of 8.7%,” Dattatreya told Lok Sabha.
The interest rate is the lowest in three years and will affect the interest earnings of over 40 million organized sector employees.
