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Labour Minister mum on EPF rates

May 21, 2003 18:59 IST

Labour Minister Sahib Singh Verma on Wednesday refused to commit whether the current rate of 9.5 per cent interest rate on Employees Provident Fund will continue or be lowered for this fiscal in view of the mounting pressures from the finance ministry to reduce what it calls the "unsustainable" rate.

Evading any specific reply to a question whether the rate would be brought down at the proposed meeting of the Central Board of Trustees of EPF later this month, he told reporters, "The employees will get the best returns."

The sub-committee on finance and investment, set up to go into the investment strategies of the fund, is likely to meet on Thursday.

Verma, who till recently was strongly opposed to any cut in EPF rates, however, appeared to have softened his stand as he cited the current lower interest rate regime in the country.

Without making any commitment, the labour minister said the government would try its best to see that the employees got maximum returns from the best possible investments.   

"We will not leave any stone unturned to see that the employees got the best returns," he added.

The sub-committee has been mandated to go into the investment strategies and submit the report to Verma, who is the CBT chairman.

The review in EPF rates comes in the wake of lower returns on the Special Deposit Schemes, which comprise over 80 per cent of the EPFO corpus.

Moreover, the finance ministry had issued a notification barring any new investments in SDS from June.
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