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EPFO nods raising Provident Fund interest rate to 8.75%

Last updated on: January 13, 2014 13:02 IST

EPFO nods raising Provident Fund interest rate to 8.75%

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Retirement fund body EPFO on Monday decided to increase the rate of interest on Provident Fund deposits to 8.75 per cent for 2013-14, a move that will benefit about 5 crore (50 million) subscribers.

"We have decided to recommend to the government 8.75 per cent rate of interest for 2013-14 to its subscribers," Labour Minister Oscar Fernandes told reporters after a meeting of the EPFO trustees in New Delhi.

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Image: An elderly woman places her ink-marked finger on her lips after casting her vote outside a polling booth during the state assembly election in Delhi December 4, 2013.
Photographs: Anindito Mukherjee/Reuters

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EPFO nods raising Provident Fund interest rate to 8.75%

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The Central Board of Trustees, which is the apex decision-making body of the Employees' Provident Fund Organisation, met on Monday and approved the interest rate.

According to sources, the body had surplus funds, which enabled the interest rate to be increased from 8.5 per cent in the previous financial year (2012-13).

The EPFO's recommendation will be vetted by the Finance Ministry.

Once the ministry approves the decision, the interest would be credited to the accounts of subscribers.

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Photographs: Illustration: Uttam Ghosh/Rediff

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EPFO nods raising Provident Fund interest rate to 8.75%

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According to sources, the decision to enhance the rate was taken in view of the forthcoming Lok Sabha polls.

The EPFO is estimated to have an income of Rs 20,796.96 crore (Rs 207.96 billion) in the current financial year.

Payment of interest at the rate of 8.5 per cent to subscribers would have required Rs 20,740 crore (Rs 207.4 billion) and left a surplus of Rs 56.96 crore (Rs 569.6 million), according to earlier projections.


Photographs: Illustration: Uttam Ghosh/Rediff

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