Though a little late, Union Labour Minister Sahib Singh Verma has realised that it will be difficult to hold onto 9.5 per cent interest rate for the employee provident fund in the low interest regime.

Verma, who doggedly refused to lower the EPF rate till recently, has started looking for the options in consultation with the finance ministry to get maximum interest for the employee provident fund.

Verma has agreed to consult the Reserve Bank of India officials on investment prospects of a substantial part of Rs 100,000 crore (Rs 1,000 billion), currently locked in the government special deposit scheme.

The meeting would take place shortly, official said.

There is a growing concern in the labour ministry with the government deciding to discontinue the special deposit scheme.

Sources said Verma would meet finance minister Jaswant Singh to discuss the issues threadbare. In response to Verma's letter seeking an assurance of 'guaranteed return' on EPF money, Singh is reported to have deputed RBI officials to explain the position to the minister.

At the same time, the labour ministry is trying to co-opt various welfare schemes announced by the finance minister before introducing the legislation for workers of the unorganised sector in Parliament.

Official sources said the umbrella legislation for the unorganised sector proposed initiating pension scheme for workers, artisans and self-employed workers.

Though Verma had requested Singh to earmark Rs 1,000 crore (Rs 10 billion) for this, there was no such separate provision in the Budget.

Sources said the labour ministry had also proposed to take up pension schemes for the self-employed and other welfare measures to get a separate corpus of fund for initiating schemes covered under the proposed legislation.

Obviously, the finance ministry is sceptical about creating a separate fund for initiating the pension scheme for workers in the informal sector.

Verma had also asked for some government contribution to attract a large population under the social security net.