The Employees’ Provident Fund Organisation announced its plan to reduce interest on provident fund for the current fiscal year, 2019-2020. The plan is to reduce the interest by 0.15 per cent as the PF interest rate for 2018-2019 was 8.65 per cent.
Labour Minister Santosh Gangwar reported that the interest rate has been cut, and brought down to 8.50 per cent. Since the savings of over six crore employees is in question, the same has to be approved by the Finance Ministry of India.
The Central Board of trustees comprising many employers and employees met the Labour Minister and a decision was made to lower the interest rate of employees’ provident fund accounts for the year ending March 2020.
Although the Finance Ministry is yet to take a call on the reduced interest rate, it has been in talks with the Labour Ministry to align the EPF interest rates with other government saving schemes, such as post office saving and public provident fund.
EPFO assists the Central Board in administering the compulsory contribution towards the Provident Fund Scheme, Pension Scheme and Insurance Scheme for the workforce engaged in the organised sector in India.