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EPF board meets on Tue to discuss rate cut

The Central Board of Trustees of Employees Provident Fund meets in New Delhi on Tuesday in the backdrop of pressure from the finance ministry to lower the interest rate on EPF from 9.5 per cent now to nine per cent.

The meeting, to be chaired by the new Labour Minister Sahib Singh Verma, who is the ex-officio chairman of the board, assumes significance as the finance ministry has spurned CBT's request to retain the interest rate at 9.5 per cent saying it was not in line with the lowering of rates in small saving schemes and general provident fund.

Though the finance ministry is of the view that in a soft regime, the rate of interest on EPF should be lowered, Verma has ruled out any cut in the existing rate saying he would not approve of any measure which affected the interest of workers.

The CBT had in April this year decided to continue with 9.5 per cent interest rate for an "interim" period notwithstanding the finance ministry's recommendation to cut the rate by 0.5 per cent.

Verma's predecessor Sharad Yadav had at the last meeting of the board favoured continuation of 9.5 per cent rate saying the EPF would still have a surplus of Rs 1.15 billion if it continued with the existing rate, though at 9.0 per cent interest the surplus would be Rs 4.11 billion.

The board is also likely to consider amendments in the EPF Act to introduce multi-benefit employees insurance scheme, permanent social security number and phased reduction in threshold limit for EPF coverage.

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