Labour Minister Sahib Singh Verma reiterated on Thursday that there was no need to reduce the interest rate on the Employees' Provident Fund.

Verma's assurance follows an attempt by the finance ministry to lower the interest rate on the fund from 9.5 per cent to 8.5 per cent. He also said Finance Minister Jaswant Singh was not averse to retaining the existing interest rate, if it was sustainable.

"I am certain the Employees' Provident Fund will earn adequate money to provide dividends at the rate of 9.5 per cent," Verma told newspersons while explaining the welfare measures initiated by the labour ministry.

Obviously, Verma's assertion is in sharp contrast to the steps initiated by the finance ministry favouring a reduction in the rate of interest on EPF. The ministry has even withdrawn special deposit schemes with higher rates of interest.

Verma drew flak in the meeting of the Central Board of Trustees for the government's move on the issue.

His statement is intended to convince trade union leaders that the government will do nothing to harm workers' interests.

The minister, however, gave enough indications to suggest that the ministry had given up the agenda of labour reforms for the time being.

Clarifying that there was no move to bring in a Bill to amend the Industrial Disputes Act and the Contract Labour Act, the minister said the government was keen to introduce a law for providing security to workers of the informal sector soon.