The government on Thursday ruled out any cut in interest rates on Employees' Provident Fund this fiscal from the present 9.5 per cent, but said it would be reviewed only next fiscal based on the surplus position, Labour Minister Sahib Singh Verma told PTI after a meeting with Finance Minister Jaswant Singh in New Delhi.

The Employees Provident Fund Organisation as of now has a surplus of Rs 127 crore (Rs 1.27 billion) based on the 9.5 per cent of interest rates to its members.

Speculations have been rife regarding the cut in interest rate on provident fund with the finance ministry exerting repeated pressure on the labour ministry to slash the rates in line with falling interest rate regime, particularly for small savings and bank deposits.

However, the labour ministry has all along been maintaining that even if the rate of interest continued at 9.5 per cent, EPFO would still end the fiscal with a surplus and that employees should not be offered lower rates on their hard earned money.

Referring to his meeting with the finance minister, Verma said the labour ministry has sought a higher Rs 720 crore (Rs 7.2 billion) plan allocation for pension contribution for workers this fiscal as against the revised budget estimate of Rs 400 crore (Rs 4 billion).   

Verma said the finance minister promised that he would look into the deficiencies in Plan allocation and spendings.

On pension reform for the unorganised sector, he said, "The government might provide some support in addition to the contribution made by employers and employees."

The labour ministry also took up the proposal of setting up five industrial tribunal cum labour courts with the Finance Minister, Verma said.

The ministry also sought that tax exemptions, now enjoyed by vocational training institutes in rural areas, should be extended to those in cities also.

Verma demanded exemptions from customs and excise on imported machinery and on stipends paid to apprentices.